Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — WALES

Infrastructure, Gwent

Mr. Roy Hughes: To ask the Secretary of State for Wales if he has any plans to visit Caldicot, Gwent, to discuss development of the infrastructure.

The Secretary of State for Wales (Mr. David Hunt): No, Sir.

Mr. Hughes: Does the Secretary of State nevertheless recognise the increasing importance of Caldicot, which is supposed to be the site of the second Severn crossing? Residents who live alongside the site fear the congestion that there will be in the area, particularly on the B4245. Can the Secretary of State give an up-to-date assessment? As for the transport difficulties in the area, residents are calling for a park-and-ride facility at the Severn tunnel junction and a halt at Magor. Will the right hon. Gentleman do what he can to push those projects?

Mr. Hunt: We are pleased to announce the advancement of work on the access road, subject to the satisfactory completion of parliamentary procedures. The access road east of junction 23 at Magor will be used by construction traffic for the second Severn crossing toll

plaza; otherwise, it would have used the B4245 through Magor and Undy. I hope that that will reassure local residents. I will consider carefully the hon. Gentleman's other point.

Sir Anthony Meyer: When the Secretary of State visits Gwent to discuss infrastructure, would he care also to discuss with the right hon. Member for Islwyn (Mr. Kinnock) the superstructure of the Labour party?

Mr. Hunt: I am not sure that that will be possible, but the news that the right hon. Member for Islwyn (Mr. Kinnock) is to continue as leader of the Labour party is the best news that I have heard for a very long time.

Mr. Anderson: As I hope that the Secretary of State knows, Caldicot is alongside the Severn tunnel junction and the main through rail route to Ireland. Will the right hon. Gentleman undertake to look at the European rail network as projected by British Rail, which shows a thick black line along the north Wales route to Ireland and seems to put much less priority on the south Wales route to Ireland? Will the Secretary of State consider that matter in the light of the development needs of south Wales and try to ensure that the south Wales route to Ireland is not neglected?

Mr. Hunt: I certainly agree with the hon. Gentleman that, subject to British Rail's commercial judgment., it is vital that Wales should get the best possible advantage out of the construction of the channel tunnel.

Tertiary Education

Mr. Martyn Jones: To ask the Secretary of State for Wales what representations he has received about the implementation of tertiary education in (a) Clwyd and (b) Wales as a whole.

The Minister of State, Welsh Office (Sir Wyn Roberts): The establishment of tertiary education is inevitably linked with proposals by local education authorities to reorganise their secondary provision. I have received numerous representations from members of the public in Clwyd and


other parts of Wales on a range of issues connected with secondary reorganisation, including the principle of tertiary education.

Mr. Jones: I hope that the Minister supports the principle of tertiary education and that when he receives representations from Clwyd county council for the funding of its proposals he will listen sympathetically and make sure that the authority gets enough finance to put tertiary education properly in place in a way that will work and will help Welsh-medium tertiary provision in Clwyd and Wales as a whole.

Sir Wyn Roberts: Of course I acknowledge that there is a great deal to be said for tertiary education, which has the advantage of combining sixth-form education with further education. However, my right hon. Friend the Secretary of State for Wales and I do not come into the discussions of the proposals in Clwyd or elsewhere. My right hon. Friend comes into them only when proposals are made to change the character of secondary schools, possibly as a result of tertiary education proposals.

Mr. Raffan: As and when my hon. Friend receives approaches from Labour-controlled Clwyd county council for extra funding for tertiary education, will he reject them until the authority has made an effective reduction in surplus places in the primary and secondary sectors?

Sir Wyn Roberts: My hon. Friend is right to draw attention to the problem of surplus places. There are 2,779 surplus places in the secondary sector in Clwyd and 44,597 in secondary schools in Wales. I assure my hon. Friend that it is not the practice of the Welsh Office to allocate funds where they are not justified to the hilt.

Dr. Thomas: Will the Minister confirm that he has received the organisation plans for tertiary education in Gwynedd and that Ministers will be able to reach an early decision on the scheme, which for the first time provides for development in further education at Dwyfor in the constituency of my hon. Friend the Member for Caernarfon (Mr. Wigley) and at Dolgellau in my constituency? Will he ensure that any plans for north Wales will be integrated between Gwynedd and Clwyd to ensure maximum border participation and so that pre-16 education at Ysgol y Berwyn Bala can be maintained?

Sir Wyn Roberts: I confirm that statutory objections have been lodged to the proposals of Gwynedd local education authority to reduce the age range of Ysgol y Berwyn Bala as part of a proposal to introduce a tertiary system. The case is currently with the Welsh Office and I therefore cannot comment on its merits.

Mr. Michael: It is disappointing that the Minister sounded a little half-hearted about tertiary education. Is he aware of its attractiveness to many young people in Wales? Given our desperate need as a nation to improve the standards of education and training and to breathe new life into them, will he note that the proportion of young people staying on past the age of 16 rose from about a third to almost a half in the catchment area of Coleg Glan Hafren, the new tertiary college in my constituency? Will the Minister give more positive encouragement and take responsibility for providing help and finance for authorities to speed up the introduction of tertiary education in Wales?

Sir Wyn Roberts: It is not for me to distinguish or discriminate between tertiary colleges, sixth-form colleges or traditional sixth forms, which are all options for consideration by local education authorities. The hon. Gentleman will know that there are tertiary colleges in Gwent, West Glamorgan and South Glamorgan. Gwynedd, as he heard, is considering them and Mid Glamorgan is, I understand, reviewing provision for 11 to 19-year-olds. It is for local education authorities to decide which system is preferable in each case.

National library of Wales

Mr. Geraint Howells: To ask the Secretary of State for Wales if he will make a statement on the future of the national library of Wales at Aberystwyth.

Sir Wyn Roberts: The national library of Wales will continue to operate under the terms of its royal charter, which lays down the objects for its functions. It will receive grant in aid, including capital, of about £5·75 million next year. This represents an increase of nearly 18 per cent. compared with this year.

Mr. Howells: I am sure that the Minister will agree that hon. Members are proud of our national institutions such as the national library of Wales. Will he give a categorical assurance that the library's status will continue for many years to come?

Sir Wyn Roberts: There are no plans to review the copyright status of the national library of Wales. Under that status, it is entitled to claim all publications, but there is no requirement that it should do so. In the interests of efficiency, it is incumbent on the national library and on other copyright libraries to keep their collections policy under constant review.

Mr. Gwilym Jones: I am glad to hear my hon. Friend's excellent announcement of grant in aid. Does not that give the clearest indication of the Government's support for the national library of Wales?

Sir Wyn Roberts: My hon. Friend is absolutely right. We are not only allocating £5·7 million to the national library next year. We are currently funding the outstore building which is under construction at the library at a cost of £1·8 million. We also footed the bill for some necessary repairs, at a cost of £1·1 million last year. Moreover, back in the early 1980s we financed the provision of a second book stack at the library.

Mr. Barry Jones: Does the Minister of State realise that rumours about departmental closures and downgrading are a source of grave concern to those who support the library and to those who work there? Does he accept that the library is not a luxury but a valuable national resource? Bearing in mind that the next century will be information driven, why does not the hon. Gentleman take a positive view and ensure that the national library is able to make the best use of satellites and fibre optics? Will he show that he intends to support this great national resource 100 per cent?

Sir Wyn Roberts: I think that we have already shown it in the figures that I gave in response to my hon. Friend the Member for Cardiff, North (Mr. Jones). I wholly agree with the hon. Gentleman that the library is a most valuable resource and we are extremely proud of it. I am sorry that


the staff inspection report, which was an internal document for comment by the Welsh Office and the national library, has been misinterpreted somewhat mischievously. We have already been in touch with the library to discuss modernisation and the use of all modern accessories to knowledge.

Pollution Inspectorate

Dr. Kim Howells: To ask the Secretary of State for Wales if the Government have plans to expand the staffing and funding of Her Majesty's inspectorate of pollution in Wales in 1991.

The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist): At present, Her Majesty's inspectorate of pollution has nine inspectors responsible for pollution control in Wales. My right hon. Friend will keep the position under review with my right hon. Friend the Secretary of State for the Environment.

Dr. Howells: Is the Minister aware that many people living in communities in south Wales are very worried about the inadequacy of the inspectorate? What promises of future funding can the hon. Gentleman give to allay the fears in communities such as Llantrisant, Baglan hay and Cwmbran? Can he promise a better life in future to those who have to suffer the filthy smog that so often descends on their homes at present?

Mr. Grist: The hon. Gentleman questions the adequacy of provision for HMIP. We are determined to ensure that that provision is kept up to the mark and constantly reviewed, and under the integrated pollution regulations there will probably be a requirement to increase the complement of staff.

Local Government Finance

Mr. Wigley: To ask the Secretary of State for Wales what discussions he has had with local government representatives from Wales on the working of the community charge.

Mr. David Hunt: I have had several such discussions.

Mr. Wigley: In view of the enthusiasm that the Secretary of State and his colleagues showed for the candidacy of the right hon. Member for Henley (Mr. Heseltine) in the recent leadership election, will he tell the House that he wholeheartedly supports the attempts of that right hon. Gentleman to do away with the poll tax, lock, stock and barrel? is he aware of the devastating effect that the tax is having on people on low incomes in Wales? Is he aware that, in respect of a third of those due to pay, the cost of collection will be greater than the sums that the authorities will receive? Can he assure us that the poll tax will be brought to an end at the end of this financial year?

Mr. Hunt: No, I cannot, but I wholeheartedly endorse the expressed need for a thorough, constructive and fundamental review.

Mr. Dickens: Does my right hon. Friend agree that when people in Wales or elsewhere choose not to pay their community charge they are saying that they want someone to pay it on their behalf, and that that is really getting up people's noses? Does my right hon. Friend agree that people should pay their way and that those who are not

paying the community charge are the same people who have been in rent arrears and rate arrears in the past? They want everything for nothing. They want someone else to pay for them.

Mr. Hunt: I completely agree with my hon. Friend that anyone not paying the community charge is seeking to have a free ride at the expense of the rest of the community. I am confident that the vast majority of the people in Wales will pay their community charge.

Mr. Barry Jones: As a Minister of State at the Department of the Environment the right hon. Gentleman tried to reform the poll tax, but in a recent parliamentary answer he confirmed his belief that the poll tax is fair, as he also said on 15 January. Does the right hon. Gentleman not realise that the only decent thing to do with the poll tax is to abolish it? As the proud architect of it, does he still support the hated poll tax and does he still support it in Wales?

Mr. Hunt: Not only I but the vast majority of people support the principle behind the community charge—that everyone should pay something towards the cost of the local services that they use. As to the future, the hon. Gentleman will know that Labour's proposal is to return to the unjust, inequitable domestic rating system. If he wants to bandy quotations with me, I am quite willing to enter into a contest. The Leader of the Opposition, describing local rates, said:
The most unjust of all taxes"—
[Interruption] The Opposition do not like that and I do not blame them. The Leader of the Opposition said:
The most unjust of all taxes, local rates, take most from those who can afford least.
That is what the hon. Member for Alyn and Deeside (Mr. Jones) is proposing.

Mr. Livsey: To use fading terminology, will the Secretary of State abolish the poll tax at a stroke and replace it with a local income tax based on people's ability to pay, as recommended by the Layfield Committee?

Mr. Hunt: The hon. Gentleman will know that when we considered various proposals for local taxation in the Green Paper in the early 1980s, we looked at a number of proposals including local income tax and we concluded that of all the systems then on offer the community charge represented the best, and we then introduced it. However, it is right that, having introduced a new system, we should constantly and continually keep it under review and that is exactly what we propose to do.

Housing

Mr. Murphy: To ask the Secretary of State for Wales when he last met leaders of district councils in Wales to discuss housing matters in the Principality.

Mr. Grist: My right hon. Friend addressed members of the Council of Welsh Districts on 18 September, when housing and other matters were discussed. I chaired a meeting of the Welsh housing consultative committee on 9 August.

Mr. Murphy: Does the Minister agree that even on his own figures, 20,000 people in Wales are homeless as we approach Christmas? Bearing in mind that the


Government have been in office for nearly 12 years, does he accept that that is a disgraceful and crushing indictment of their housing policy?

Mr. Grist: I notice that the hon. Gentleman's council of Torfaen has been able to cut homelessness by 15 per cent. in the 12 months to March, which rather gives the impression that if other councils put their minds to the provision of housing instead of actually building houses, they could make better use of the money available to them—which, after all, increased by 15 per cent. this year over the previous year's figure—and the £2 million which was made available especially to local authorities for homelessness provision. That is the way the hon. Gentleman should look forward.

Mr. Gwilym Jones: We are all grateful to my hon. Friend the Under-Secretary of State for the hard work that he puts in at the Welsh Office. He has become a very good Minister, not least on the subject of housing. What is the latest allocation to Housing for Wales and what will it mean in terms of new houses?

Mr. Grist: I thank my hon. Friend for the very kind start to his remarks. The increase in the current year was 42 per cent. on the previous year, which itself was 30 per cent. up on the previous year. Through Tai Cymru we have been providing adequate provision for housing association build, which many local authorities have been putting to good use by adding more than £17 million of their own money to get joint financing. That is the way forward which we believe would best answer the needs of specific groups whom local authorities are seeking to house.

Farming

Mr. Ron Davies: To ask the Secretary of State for Wales if he will make a statement on the effect of the current GATT negotiations on the future of Welsh farming.

Mr. David Hunt: Whatever compensatory measures come out of the Commission, we shall work hard to ensure that they are in the best interests of Welsh farmers.

Mr. Davies: Why do not the Government take the opportunity presented by the GATT negotiations to renegotiate the common agricultural policy so that, instead of benefiting bureaucrats and middlemen, it benefits producers and consumers? Is the 30 per cent. currently agreed by the Council the maximum cut that the Government will support? If so, precisely what measures does the Secretary of State intend to introduce so that upland farmers, particularly those in Wales, will be protected from the adverse effects of those cuts?

Mr. Hunt: The figure that the hon. Gentleman has mentioned has, of course, been in place since 1986—a lengthy period. It does not necessarily mean a 30 per cent. cut in prices. I am aware of the difficulties that Welsh farmers face at present and I have discussed them with many farmers on visits to a range of farms in Wales. It is my intention and that of my right hon. Friend the Minister of Agriculture, Fisheries and Food that, when the GATT negotiations are, as I hope, successfully concluded—let us not forget that agriculture is one of 15 separate issues being discussed in the Uruguay round—we must press for

the right measures to be introduced to enable Welsh hill farmers in particular to get a good deal out of the Community.

Toxic Fumes, Rhymney

Mr. Rowlands: To ask the Secretary of State for Wales if he will make a statement about the recent escape of toxic fumes in Rhymney.

Mr. Grist: On Sunday 28 October 1990 there was an incident at the waste disposal site at Rhymney, operated by Euromet Ltd. under a licence issued by Rhymney Valley district council. A chemical drum on the site ruptured, releasing a quantity of noxious vapour.
Officers of the Rhymney Valley district council attended the site that evening and the council which, as licensing authority is responsible for the supervision of the activities at the site, subsequently instructed its officers to take action to secure the removal of waste and drums from the site through exercise of its powers under the Control of Pollution Act 1974.
The hon. Gentleman will know from my letter of 19 November that the Rhymney Valley district council is under a specific duty, as licensing authority, to ensure that the licensed activities at the site do not cause pollution of water or danger to public health or become seriously detrimental to the amenities of the locality. Our Department is continuing to keep in close touch with the council's response to this incident.

Mr. Rowlands: Is the Secretary of State aware of the enormous resentment and bitterness in the Rhymney community at the fact that people can dump 6,500 drums of noxious waste in the community without any form of planning permission? Is he aware further that there is considerable resentment at the complacency shown by the Health and Safety Executive and other organisations in that respect? Will he therefore meet the fears and wishes of the Rhymney community by revoking the licence and financially assisting the local authority to clear the site?

Mr. Grist: The hon. Gentleman persists, as do others, in avoiding the fact that the matter is in the hands of the local authority. It is most disappointing that, when the Welsh Office has taken the side of local authorities in allowing them to continue to be responsible in such matters, as opposed to what is happening in England, difficulties of this kind occur which tend to undermine that position. It was up to the local authority, which in turn revoked the licence in part—it could have revoked it entirely and closed down the operation, but it chose not to do so—and there is now an appeal to the Welsh Office. The local authority again failed until 6 November to provide information on which the Welsh Office could decide the appeal.

Coal Industry

Mr. Denzil Davies: To ask the Secretary of State for Wales when he next intends to meet the chairman and directors of British Coal to discuss the future of the coal industry in Wales.

Mr. David Hunt: Shortly.

Mr. Davies: Does the Secretary of State realise that British Coal's latest announcement about the Betws


coalfield and mine means that it has now abandoned the west Wales anthracite coalfield? As west Wales anthracite coal has the lowest sulphur content of all coal west of the Ukraine, and as there is now the technology to develop it, does he agree that the board of British Coal has shown criminal incompetence and, frankly, an awful lack of imagination? If they had been workers, not directors, those concerned would have been sacked a long time ago.

Mr. Hunt: Against the background of my own personal concern for the coal industry in south Wales and as somebody who has been underground at Betws—[Interruption.]

Mr. Speaker: Order.

Mr. Hunt: The right hon. Gentleman should choose his words more wisely. I utterly reject the accusation that he made against British Coal. This is very much a matter for its commercial judgment.

South Wales Coalfield

Mr. Alan W. Williams: To ask the Secretary of State for Wales if he will give the number of jobs involved in (a) deep mining and (b) opencast mining in the south Wales coalfield.

Mr. David Hunt: A total of 3,200 in deep mining and 1,500 on opencast coal mining operations conducted by the British Coal opencast executive.

Mr. Williams: I noted the Secretary of State's comments to my right hon. Friend the Member for Llanelli (Mr. Davies) about his personal concern about jobs in coal mining. We in south Wales know only too well what that means. In the anthracite coalfield, from which we come, 3,000 jobs have been lost in the past five years, leaving just 100 jobs at Betws. Is the right hon. Gentleman aware that British Coal's policy in our area of Dyfed seems to be very much for opencast coal mining, which is causing ever more environmental damage, and the sites of which are getting ever closer to large villages and communities? Will he ask British Coal to review its policy for the development of our high-quality, low-sulphur antracite resources?

Mr. Hunt: On the first point about deep coal mining, having been underground several times in south Wales, I know the geological problems—[HoN. MEMBERS: "Oh."] Do not let us underestimate the geological problems that face south Wales miners, which have, in many ways, made their task supremely difficult. The question of opencast mining is very much a matter of reaching the right balance between environmental considerations on the one hand and the economic justification for that opencast coal on the other.

Mr. Coleman: I join my right hon. and hon. Friends in their condemnation of the National Coal Board in respect of the deep mining of anthracite. Can the Secretary of State put a figure on the profitability of opencast mining in south Wales over the past three years? Can he also put a figure on the amount of money, in terms of social benefits, that has been put into the communities that are afflicted with opencast mining?

Mr. Hunt: I shall readily supply the figures about the profitability of individual opencast or collective opencast operations, if the hon. Gentleman lets me have his detailed

questions. British Coal and I should be glad to supply the figures. However, the important point is that while, on the one hand, there is an economic justification for opencast coal—often it is needed to be blended with deep-mined coal to make the coal acceptable to power stations—on the other hand, serious environmental implications must be taken into account. It is important to get the balance right.

Health Authorities

Mr. Win Griffiths: To ask the Secretary of State for Wales what discussions he has had with health authorities on their current financial situations; and if he will make a statement.

Mr. David Hunt: My officials and I have had many such discussions.

Mr. Griffiths: Would the Secretary of State like to explain why on 31 August the Minister of State wrote a letter to Dr. D. B. Powell of the Princess of Wales hospital in Bridgend stating that the Mid Glamorgan district health authority had underspent according to the figures provided up to 31 July, yet on 10 November the health authority reported in the press that it was £1·2 million overspent? Does he agree that that reflects the position throughout Wales? What does the Welsh Office intend to do about the underfunding of the health service in Wales?

Mr. Hunt: The hon. Gentleman should look at the facts and statistics when he refers to the underfunding of the health service in Wales. When this Government came to office in 1979, the amount spent on the health service in Wales was £481·5 million, and this year it was £1,540 million—more than treble. The financial allocation in Mid Glamorgan for 1978–89 was £49 million and this year the provisional recurring allocation is £160 million. There has been a substantial increase in cash terms and the hon. Gentleman should look at the facts and statistics before attempting to reach conclusions such as the one that he just made.

Hospital Waiting Lists

Mr. Flynn: To ask the Secretary of State for Wales what initiatives he intends to announce on measures to reduce hospital waiting lists.

Mr. Grist: A number of initiatives to reduce waiting times and lists have already been successfully introduced at a cost of £6 million since 1986. As I told the hon. Gentleman on 29 October, I am currently considering what further means may be appropriate under the new arrangements for contracted health care from 1 April 1991.

Mr. Flynn: Does the Minister recall telling me in answer to a written parliamentary question that he did not know how many patients from Wales were currently being treated in hospitals outside Wales? As at least 3,000 beds are to be closed in the London district and elsewhere in England because of the Government's balance sheet first, patients last policy, how can he assess what will happen to patients on waiting lists in Wales next winter? Will it be a winter of waiting and suffering? Will he confirm or deny the speculation that his job is about to be ditched and that he is to be replaced by a representative of the loony right?

Mr. Grist: The hon. Gentleman started sensibly and finished foolishly. He will know that his health authority has been successful in reducing waiting times for urgent in and out-patients during the past 12 months. He should also be aware that calculations have been made about the flow of patients across borders, so that financing can be made available to cover that eventuality. He raised an interesting subject about the movement of patients, which is part of the contractual process to which I referred in my original answer.

Mr. Morgan: Does the Under-Secretary of State agree that one initiative that would cut hospital waiting lists would be to reject entirely the proposal submitted to him by South Glamorgan health authority to close six hospitals, three of them in my constituency? Does he further agree that he was expected to announce his decision on the matter on Friday 30 November, but has delayed his decision by several weeks? Is that a sign that we are to have the worst of all Christmas presents from the Secretary of State?

Mr. Grist: I think that the hon. Gentleman would wish to have a settlement as early as possible—although his last remark perhaps shows that he does not. He must appreciate that I cannot comment on what he said because the matter is under consideration.

Welsh Lamb Enterprise

Mr. Raffan: To ask the Secretary of State for Wales if he will make a statement on the percentage of Welsh sheep farmers who support Welsh Lamb Enterprise.

Mr. David Hunt: Forty-five per cent., which is not enough.

Mr. Raffan: I am grateful to my right hon. Friend and glad that he said that the percentage is not enough, because it is not. Will he do his utmost to impress upon the farming unions in Wales that far more sheep farmers must support Welsh Lamb Enterprise? If they want to market the product, they must support the scheme, believe far more in marketing, and do far more for marketing.

Mr. Hunt: Yes I shall, and I agree.

Mr. Ieuan Wyn Jones: I wholeheartedly endorse the fact that Welsh sheep farmers should look positively at marketing, but does not the Minister realise that the 30 per cent. cut in support prices could mean that up to a quarter of Welsh sheep farmers will go out of business? Does not he realise that he must stand up for Welsh farmers? Why does not he go to the EC negotiations and the general agreement on tariffs and trade talks, stand up for Welsh farmers and be like the Prime Minister—his own man in Wales?

Mr. Hunt: The hon. Gentleman should not be overtaken by his own verbosity. I shall stand up for Welsh sheep farmers just as my right hon. Friend the Minister of Agriculture, Fisheries and Food, with the support of us all, stands up for the interests of Welsh farmers in Brussels.
The hon. Gentleman should not exaggerate the situation as he has done. The 30 per cent. figure does not mean a 30 per cent. cut in prices; it is a figure since 1986, not as from now, and it is important to stop any misleading comments that can only undermine confidence in the industry.
I am happy to have been able to authorise two advance payments of the sheep annual premium, which have meant an extra cash injection for sheep farmers in Wales of £25 million.

Roads (Expenditure)

Mr. Knox: To ask the Secretary of State for Wales what has been the total spending by central Government on roads in Wales since 1979; and how many miles of motorway and trunk roads have been laid since that year.

Sir Wyn Roberts: Since 1979, total net spending by central Government on motorway and trunk roads in Wales has exceeded £1·2 billion. In addition, over £260 million of transport supplementary grant has been provided to Welsh local authorities for improvement of their roads. Twenty-two miles of motorway and 134 miles of trunk road have been completed. Seven schemes totalling 16 miles are under construction.

Mr. Knox: May I congratulate my hon. Friend on the size of expenditure on roads in Wales since he became a Minister 11 and a half years ago? Can he say anything about work in progress on the north-south road?

Sir Wyn Roberts: I am glad to tell my hon. Friend that we have spent about £100 million since 1979 on improving the A470 north-south route; and we shall spend another £100 million on that same route. We have spent £50 million on the other north-south route, the A483, since 1979, and we shall spend a further £30 million in the not-too-distant future.

Mr. John P. Smith: What does the Minister intend to do to get away from the ludicrous problem of Wales's national airport being serviced by a single-carriageway road?

Sir Wyn Roberts: We are always considering the situation of the airport and we look forward to its further development. I have heard the hon. Gentleman talk about the problems of prosperity in his area and around the airport, but he will be aware that the road to the airport is a county road.

Oral Answers to Questions — ATTORNEY-GENERAL

City Fraud

Mr. Skinner: To ask the Attorney-General when he next expects to meet the Director of Public Prosecutions to discuss City fraud; and if he will make a statement.

The Attorney-General (Sir Patrick Mayhew): Primary responsibility for the prosecution of commercial fraud rests with the Serious Fraud Office. I expect to meet the director again shortly to discuss matters of departmental interest.

Mr. Skinner: What action is the Attorney-General taking on the sale of the National Bus Company—as reported by the National Audit Office—which was sold off by Government spivs at less than half price? Has not he learnt the lesson? We hear now that the regional electricity companies are being sold off for £5 billion when their asset value is more than £16 billion. What is all this talk about


a classless society? This is a casino society run by spivs like the right hon. and learned Gentleman and his friends in the Government.

Mr. Speaker: Order. To refer to an hon. Member as a spiv is not a parliamentary expression. Will the hon. Gentleman withdraw it?

Mr. Skinner: It is not in "Erskine May".

Mr. Speaker: It may not be, but I ask the hon. Gentleman to withdraw it.

Mr. Skinner: Government spivvery.

The Attorney-General: I am grateful that in this classless society the hon. Gentleman did not describe me as a first-class spiv or a spiv of any category. I think that the hon. Gentleman is confused. Privatisation is a case of the state wanting to divest itself of that which it no longer wants to hold. Fraudsters want to divest other people of what fraudsters want to hold. I am enjoying embarking on an area of responsibility that is not mine, but the hon. Gentleman overlooks the extreme popularity of the privatisation programme—he cannot forgive that.

Debt Cases

Mr. Wareing: To ask the Attorney-General what plans he has to transfer the enforcement of cases against individuals involving debts of less than £25,000 from magistrates courts to county courts.

The Solicitor-General (Sir Nicholas Lyell): The rules for the enforcement of debts in the magistrates courts and the county courts are currently under study by the Law Commission, which expects to report in the early spring of next year.

Mr. Wareing: Does the Solicitor-General agree that there is no need to wait for that report? Under the present system and under the community charge or poll tax regulations, ordinary people can be dispossessed of their vital goods and essentials by private bailiffs as a result of liability orders dealt with by magistrates courts. Those private bailiffs are unqualified people, any Tom, Dick or Harry, and they could be thugs or have criminal records. Is not it about time that the regulations were changed so that county court qualified bailiffs could bring at least some professionalism into this dastardly business?

The Solicitor-General: The hon. Gentleman will have read the National Consumer Council report, which I suspect lies behind his question. That report contains constructive suggestions. The council recognises that any question of transfer of all such debt collecting to the county courts is a long way down the road. The report makes constructive suggestions about monitoring and control of the present bailiffs who, after all, have been collecting the rates for a long time.

Prosecution Policy

Mr. Janner: To ask the Attorney-General when he last met the Director of Public Prosecutions to discuss prosecution policy.

The Attorney-General: I last met the Director on 9 November when we discussed a variety of matters of

departmental interest. My right hon. and learned Friend the Solicitor-General met him for the same purpose on 28 November.

Mr. Janner: Did the Attorney-General and the Director discuss the flood of racist and anti-Semitic material that has been coming through the post, the latest of which is entitled "Another 'Blood Libel' or Ritual Murder"? Why have there been no prosecutions for such matters since 1986? Is it because the law is too weak, in which case it should be changed, or is it because the Attorney-General and the Government do not wish to enforce it? It must be one or the other.

The Attorney-General: It is certainly not the latter, as the hon. and learned Gentleman knows perfectly well. The Law Officers and the Director of Public Prosecutions, for whom they are responsible, take extremely seriously the writing, publication and distribution of such odious material. In the past three years some 20 cases have been referred by the Board of Deputies of British Jews to the prosecuting authorities. In only seven of those cases has it been decided to bring no prosecutions, in each instance because there was insufficient evidence to justify proceedings. In the remaining cases police inquiries are outstanding, or have been unsuccessful, or the police have decided not to refer the case to the Crown prosecution service. There has been a considerable increase in that literature—to dignify it with that word—in the past year, and police inquiries are now outstanding in 16 cases.

Mr. Lawrence: Does my right hon. and learned Friend agree that while the Government, with the support of the whole House, have put on the statute book legislation that was thought to be adequate for the prosecution of racial offences, it is a matter for the Director of Public Prosecutions, who is not a member of the Government, to decide whether there is sufficient evidence in a particular case to initiate a prosecution?

The Attorney-General: I agree. It would be damaging to bring a prosecution that was outside the criteria that are applied by the DPP to every other case and which failed. As the bona fides of the Director of Public Prosecutions and the Law Officers have been called into question, I am entitled to remind the House of a letter from the acting Commissioner of Police of the Metropolis, Sir John Dellow, in The Times last week. He said:
I know that due and proper consideration is given and cases prosecuted where there is a sufficiency of evidence.

Mr. John Morris: Will the Attorney-General discuss with the Director progress on the hearing of the appeal by the Birmingham Six? While the Crown and the defence must have adequate time to prepare their cases—

Mr. Speaker: Order. This would be more appropriate on Question 31, the next question.

Mr. Morris: I am putting a general question about the Director of Public Prosecutions.

Mr. Speaker: The right hon. and learned Member is encroaching on the next question, but go on.

Mr. Morris: Will the Attorney-General convey to the Lord Chancellor the need for an expedited hearing when the cases are ready?

The Attorney-General: I can say that as soon as the grounds of appeal of the six appellants are lodged and the Crown has had an opportunity to consider them, the case can be expected to be listed, but listing is a matter for the court authorities.

Mr. John Marshall: Does my right hon. and learned Friend agree that the inability to prosecute those responsible for some of the offensive literature to which the hon. and learned Member for Leicester, West (Mr. Janner) referred underlines the need for a change in the law?

The Attorney-General: That is arguable, but it would be difficult, as those of us who laboured over what is now the Public Order Act 1986 and previous legislation will remember, to incorporate such provisions in the 1986 Act. It is difficult to put into statutory language the sort of criteria that perhaps my hon. Friend and others wish to see in legislation. The relevant legislation is pretty comprehensive and my hon. Friend will recall its terms. In a substantial proportion of the outstanding cases that have been referred by the Board of Deputies of British Jews, the police have been unable to identify any individual who was responsible for writing the material, distributing it or publishing it.

Commonhold

Mr. Bowis: To ask the Attorney-General when he expects to bring forward legislation on the proposals of the working group on commonhold.

The Solicitor-General: The Government published "Commonhold—a Consultation Paper" on Wednesday 28 November. The Command Paper includes a draft Bill and in part IV a series of questions on which the Government are seeking views.

Mr. Bowis: Does my right hon. and learned Friend agree that the question relates to a group of leaseholders that has been especially disadvantaged in recent years? Will he hurry forward his consultation and, I hope, his implementation of the recommendations of the working party?

The Solicitor-General: I know of the close interest that my hon. Friend has taken in that matter over many years, along with other of my hon. Friends. If he can make constructive suggestions to deal with one or two rather knotty issues that are raised in the consultation paper, I am sure that that will help hurry the matter forward.

Hillsborough Victims Support Group

Mr. Hind: To ask the Attorney-General if he has any plans to meet the Hillsborough disaster victims support group; and if he will make a statement.

The Attorney-General: No. I have written to the organiser of the petition presented by the Hillsborough families support group.

Mr. Hind: My right hon. and learned Friend will be aware of the major concerns of the group about the need for justice. Is he further aware that I appreciate that he recently wrote to me to express his views on the matter, which I shall convey to the group? I should be grateful if

he ensured that in all respects the families of those who died at Hillsborough got justice. That is what concerns them above all.

The Attorney-General: No one has more faithfully represented those whom my hon. Friend mentioned than he has. Every one of the interests and concerns that he mentioned is extremely important and deserves to be taken with every seriousness.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Mozambique

Mr. Pike: To ask the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government propose to make any additional aid available to Mozambique.

The Minister for Overseas Development (Mrs. Lynda Chalker): We have a substantial programme of assistance for Mozambique, which we aim to continue. Gross bilateral aid flows in 1989 totalled over £22 million. For the international relief effort we have this year pledged 10,000 tonnes of food aid and £3·5 million of other relief assistance, plus a further £3 million in support of Mozambique refugees in neighbouring countries. We shall continue to do what we can to assist.

Mr. Pike: Despite what the Minister said, I am sure that she is aware of the case that was made recently by Oxfam, which underlined the urgent and appalling situation in Mozambique, on which I reported following my brief visit to Mozambique earlier this year. I am sure that we all look forward to the end of the civil war in that country. Will the Minister now take steps to increase aid before further people die unnecessarily in Mozambique?

Mrs. Chalker: The Government have not been ungenerous to Mozambique. We have always said that what we needed above all was a ceasefire. We warmly welcome the agreement arrived at in Rome on Saturday, under which the Government of Mozambique and Renamo have agreed to concentrate Zimbabwean troops in the Beira and Limpopo corridors. We believe that that could lead to a general ceasefire and a political settlement. We shall do all that we can from outside to help in that. When peace is restored, we can review the general rehabilitation that we know is needed in Mozambique. I hope before long to be able to go there again to make an assessment of some of the things that are needed.

Mr. Wells: Should not my right hon. Friend be congratulated on being very generous with British aid money to Mozambique, including the restoration of Beira port and the railway line to Zimbabwe? Is it true that she has received the grateful thanks of the Mozambique Government for all that she has been doing?

Mrs. Chalker: My hon. Friend is right. The Mozambique Government are most grateful for the work that we have done—which my hon. Friend described—and for the work being done by the Portia port services in Maputo port. The Mozambique Government have also done well in keeping to the targets for economic and social rehabilitation, which is why we are continuing our support. At the meeting of the consultative group on Mozambique to be held in Paris next week, we shall decide


what more should be done. I remind the House that more than £50 million of programme aid commitment has been spent in Mozambique since 1985, and that is additional to the emergency aid that has totalled more than £55 million since 1987.

Mrs. Clywd: Is not the Minister's failure to obtain additional aid for Mozambique an example of the invidious position in which the Overseas Development Administration finds itself as just a junior arm of the Foreign Office? If the ODA were to carry a Cabinet post, the right hon. Lady could sit at the Government table arguing with the Treasury for additional money for the ODA. Given her obvious merits, why did she not fight tooth and nail for a seat in the Cabinet? Has not she let down the women—

Mr. Speaker: Order. That is rather wide of Mozambique.

Mrs. Clwyd: Is not it true that, had the right hon. Lady obtained additional money for Mozambique because she was a member of the Cabinet, she would not have let down women throughout the country, including those who want additional resources for overseas development?

Mrs. Chalker: I have been pleased to obtain additional resources for the overseas aid programme and. I shall concentrate on doing that. That is why I wish to be single-minded about my task. I have had no row, of any sort, either with my right hon. Friend the Prime Minister or with my right hon. Friend the Member for Bath (Mr. Patten). That suggestion is a fiction created by the media and assisted by the hon. Lady.
Britain has done reasonably well by Mozambique. However, in our project aid and our technical co-operation, we have sought to give it practical help at a time when civil war has been raging. I am delighted to continue with that vital work for Mozambique, for the remainder of the developing world and for eastern Europe.

Eastern Europe

Mr. Barry Field: To ask the Secretary of State for Foreign and Commonwealth Affairs what progress the Minister for Overseas Development was able lo detect during her recent visit to the three know-how fund countries of central and eastern Europe on the transition in these countries to a free market economy.

Mrs. Chalker: Poland, Hungary and Czechoslovakia have already made considerable progress in coping with the enormous challenges that they face. We shall continue to help them, targeting our assistance on privatisation, financial services, management and other aspects of the creation of a market economy.

Mr. Field: Will my right hon. Friend consider modest funding for the Polish Resettlement Act 1947, which has never been repealed? That would assist Polish citizens who so wished to return to their country, taking with them the considerable wisdom and experience that they have gained from living in one of the most dynamic economies and democracies in Europe.

Mrs. Chalker: I thank my hon. Friend for that suggestion. I know that the Act was designed to meet a highly specific and now historic need. The present position is very different and I shall consider what my hon. Friend

said. I believe that British residents of Polish origin are not only very happy living here, but very happy with their involvement in the rehabilitation of Poland, including some who are assisted through the know-how fund.

Mr. Canavan: I do not begrudge the assistance given to eastern Europe, but will the Minister give an assurance that it is not simply a transfer of resources that would otherwise assist developing countries in the third world?

Mrs. Chalker: Yes, Sir.

Miss Emma Nicholson: I congratulate my right hon. Friend on the wide-ranging ministerial expertise that she brings to her current portfolio and on the shining example of intellectual rigour and first-class work that she gives us all—

Hon. Members: Reading.

Mr. Speaker: Order.

Miss Nicholson: Will my right hon. Friend confirm that it is the United Kingdom's expertise that is changing the economies of Poland, Hungary and Czechoslovakia and that it is British input—with the London School of Economics arguing about competition, as opposed to Harvard arguing about ownership—that will ensure that those countries' economies will really bowl forward?

Mrs. Chalker: I thank my hon. Friend for her remarks. I was privileged to see implemented at the unique Tonsil factory in western Poland—one of the first to be privatized—the know-how that my hon. Friend described. I was impressed also by the attitude shown by the works council towards its involvement. We should congratulate the Polish Government on publishing last Friday details of their first five privatisations; that development also is receiving considerable help from British know-how.

The Gulf

Ms. Primarolo: To ask the Secretary of State for Foreign and Commonwealth Affairs if he has made an assessment of the impact of the Gulf crisis on developing countries.

Mrs. Chalker: The effect will vary widely from country to country and any complete assessment is complicated because of uncertainty of future oil prices. But our tentative assessments, and those of the World bank, suggest that over a full year, many developing countries could suffer direct losses of about 2 per cent. of gross domestic product. A few will be much worse hit. Against that, oil-exporting developing countries will gain—some of them very substantially.

Ms. Primarolo: None of us would begrudge aid to any area in the middle east during the crisis. Britain's contribution has taken another £60 million out of its overseas development aid budget, with no hope of compensation. As to the crippling effect on developing economies of rising oil prices, does the Minister accept that article 50 of the United Nations charter provides for such countries to receive international compensation, but that no money is currently available? If the right hon. Lady had a seat in the Cabinet, could not she put her full force behind the argument for establishing a fund to compensate developing economies that will otherwise be crippled?

Mrs. Chalker: The resources for eastern Europe are quite separate from those for the developing world, formerly known as the third world. It is clear from our discussions with the International Monetary Fund and the World bank that we shall be able to help many of the countries that have been hit. However, even more

important is the agreement that we seek on debt relief, from which some of the worst affected countries could benefit significantly. I refer to the Trinidad terms put forward by my right hon. Friend the Prime Minister—which I hope all countries will support, as they will help nations in need.

Iraq (Talks)

Mr. Gerald Kaufman: (by private notice): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's policy towards President Bush's invitation to Iraq for talks on the Gulf crisis.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): I begin with an apology. Unhappily, I have lost my voice, so I am somewhat less audible than I would wish to be.
We welcome the United States initiative, which is designed to increase the peaceful pressures on Iraq and to reinforce the need for compliance with United Nations Security Council resolutions. As President Bush and Secretary Baker have made clear, the purpose is not to negotiate with Iraq. It is rather to leave the Iraqi leadership in no doubt as to the determination of the international community to see Iraq's withdrawal from Kuwait in accordance with the requirements laid down by the United Nations.

Mr. Kaufman: The Opposition also welcome President Bush's initiative, as an imaginative attempt to solve the crisis peacefully.
Will the hon. and learned Gentleman tell the House whether the British Government were consulted in advance by President Bush, and if so when, and can he say whether the United Kingdom Government will take part in the talks? Will he confirm that the 12 United Nations Security Council resolutions on the Gulf crisis stand and cannot deviate? Will he also confirm that these resolutions require Iraq's unconditional withdrawal from the whole of Kuwait, and the unconditional release of all hostages? Will he further confirm that resolution 660, which was passed on 2 August and has been reaffirmed many times since, calls upon Iraq and Kuwait to begin immediate intensive negotiations for the resolution of their differences, and that such negotiations can begin once the UN Security Council resolutions on withdrawal and the release of hostages have been implemented?
Will the Minister further confirm that, once the Security Council resolutions requiring withdrawal and release of hostages have been carried out, the way will be clear for the international conference on the middle east for which the Labour and Conservative parties in this country have been calling for many years? Will he agree that that conference can deal with self-determination for the Palestinians, resettlement of Palestinian refugees, Israeli security, a peace settlement in the middle east and the withdrawal of foreign forces, removal of all non-conventional armaments from the middle east and control of arms sales to the region? Will he point out that all these great prizes are open for discussion as soon as the Security Council resolutions are implemented?
Will the hon. and learned Gentleman send President Bush the good wishes of the House for the success of his initiative, and a peaceful resolution of the crisis on the basis of the Security Council resolutions?

Mr. Hogg: I am grateful to the right hon. Gentleman for his support. On his first question, we were indeed given notice of what occurred. On his second question, the 12

resolutions are still in place. On his third question, my right hon. Friend the Secretary of State has no plans to go to Iraq.
On the other resolutions, the position is quite plain. The United Nations resolutions require Iraq to leave Kuwait unconditionally, to release the hostages, and to restore the legitimate Government of Kuwait. Once that has happened, and not until then, there is some unfinished business which can be addressed, one aspect of which is the Palestinian question. I make it plain to the House that we see no linkage between the two.

Sir Peter Tapsell: Will my hon. and learned Friend bear in mind the fact that many of us share the misgivings about the latest development that Mr. Henry Kissinger expressed yesterday, and that we would be very concerned indeed, even if Iraq were to withdraw from Kuwait, if Saddam Hussein were left in possession of chemical and biological weapons, and possibly the capacity to produce nuclear weapons and to deliver them, as I have been told, to areas as far afield as Sicily?

Mr. Hogg: I entirely understand my hon. Friend's misgivings. On his central question, by the invitation that he has extended, President Bush seeks to make it wholly plain to Saddam Hussein that the resolutions mean precisely what they say—that he must comply unconditionally with the resolutions by 15 January or face the possibility of being driven out of Kuwait by force. This is not a process of negotiation. It is a desire to make it plain to Saddam Hussein, so that he understands the position without any doubt or equivocation.

Mr. Tony Senn: Is the Minister aware that the talks—which have been requested urgently from the outset by people all over the world—will receive a warm welcome? Is he aware that the pressure for them to take place was primarily a result of the worldwide campaign for a peaceful solution on the basis of implementation of all the United Nations resolutions, including that applying to the west bank and Gaza? This has been prompted by the catastrophe of war which is becoming apparent all over the world, not least in the United States.
Does the Minister agree that the Government have no moral right to commit our troops to battle, or to put at risk the lives of 1,400 British citizens in Iraq and Kuwait, without the explicit consent of the House of Commons? That has been urged strongly in the United States—under its own constitutional provisions—but ought, on moral grounds, to apply in the United Kingdom as well.

Mr. Hogg: It is, of course, very important that there should be no misunderstanding of the nature or purpose of the talks. The purpose of the invitation issued by President Bush is to ensure that Saddam Hussein understands clearly that he must comply, fully and unconditionally, with the United Nations Security Council resolutions; and that, if he does not do so, he faces the risk of being driven out of Kuwait by force.
As for the second part of the right hon. Gentleman's question, the Labour and Conservative Front Benches share a common stance. I am sorry that the right hon. Gentleman is unable to support his own Front Bench on this matter.

Mr. Robert Hayward: I welcome what my hon. and learned Friend has said this afternoon, especially


in relation to the gesture of good will made by President Bush. Will my hon. and learned Friend emphasise that the greatest gesture that President Hussein could make would be immediately to release all hostages of all nationalities? Will he also convey the message that it is not appropriate—in saying this I make no criticism of the right hon. Member for Chesterfield (Mr. Benn)—for President Hussein to release hostages to one emissary when he has announced that he will release the same group of people to a previous British emissary—my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath)? President Hussein is currently claiming credit twice over.

Mr. Hogg: I pay tribute to my hon. Friend, and indeed to his family support group, for the work that they have collectively done; it has been of great value to families and hostages.
I entirely agree with my hon. Friend's substantive point. The detention of hostages by Saddam Hussein is a wicked and immoral act. It is also contrary to international law. He should release them forthwith.

Mr. Geoffrey Lofthouse: My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) asked whether there had been prior consultation. If so, when was it—or were the Government notified only a few minutes before the talks?

Mr. Hogg: We were informed of the impending announcement before the announcement.

Mr. Ivan Lawrence: May I thank my hon. and learned Friend—or, rather, Her Majesty's Government—for standing firm against any linkage with the Israeli-Palestinian dispute??Does he agree that, if Saddam Hussein were to withdraw because any linkage had been conceded, not only would he be being rewarded for his infamy, blackmail and slaughter of Kuwait, but the chances of a nuclear conflict that would result in the deaths of many thousands of people would be much enhanced?

Mr. Hogg: I entirely agree with my hon. and learned Friend. There is no linkage. It would be absurd to say that the solution to a problem that had recently developed must be postponed until the resolution of a long-standing and intractable problem. Let me add, however, that, once the UN Security Council resolutions have been complied with in full by Iraq, there will be unfinished business—and that unfinished business includes a serious attempt to resolve the Palestinian problem.

Mr. Tam Dalyell: Do the Government believe the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who told us that the Kuwaiti oilfields are deep mined by the Iraqis? What technical information is available to the Government about the effect of the detonation of oilfields by deep mines? Do the Government dispute that the sulphur dioxide, carbon monoxide and carbon dioxide consequences could travel 750 km or more from the area in which the oilfields were blown up? There is talk about the military options. What assessment has been made of the ecological, quite apart from the human, consequences?

Mr. Hogg: If the hon. Gentleman is saying that war is a bloody and beastly business which one should avoid if at all possible, I entirely agree with him. The British

Government's position, and that of the Labour Front-Bench spokesmen, is plain: we wish to avoid war. We hope very much that Iraq will comply with the Security Council resolutions by 15 January. If it does, there will be no war. Otherwise, Iraq faces the possibility of being driven out of Kuwait by force.

Mr. Jacques Arnold: Has my hon. and learned Friend reflected on the fact that, had Israel not acted in 1981, our armed forces would be facing a nuclear-armed opponent? Whether or not Saddam Hussein withdraws from Kuwait, what should we be doing to deal with Iraq's nuclear, chemical and biological warfare capabilities?

Mr. Hogg: The first thing to do is to secure unconditional compliance with the Security Council resolutions.

Mr. D. N. Campbell-Savours: Many of us will support military conflict, if it is necessary, but as a position of last resort. Is there not a position of first resort? Ought not the Government discreetly try to exert pressure on Mr. Bush to widen Mr. Baker's remit so as to hold discussions on matters that might lead to an end of the crisis, or are we simply going to lull ourselves into war without considering the consequences?

Mr. Hogg: Neither the American Government nor Her Majesty's Government, or any other Government involved in the matter, regard war as being a position of first resort. As I have just said, it is a beastly and bloody business which one should avoid if at all possible. It is also, however, true that Iraq has invaded its neighbours, killed its citizens and stolen its property. Iraq must now comply with the Security Council resolutions. It has a further six weeks in which to do that. It has plenty of time. If Iraq does not do so, at the expiration of that time it faces the risk of war.

Mr. Anthony Beaumont-Dark: Does my hon. and learned Friend accept that many of us have been saddened by the appeasers' road to Baghdad that has been taken by some right hon. Members and by other spent volcanos of so-called leaders in Europe? Is it not time for us to say that what President Bush is really saying is that he is willing to give peace one more chance to stop bloodshed, but that what he is not willing to do is to give way on the fact that Kuwait has to be free? If Kuwait is not free, Saudi Arabia, the whole middle east and possibly the whole world could be involved in war. Is that not where we stand—for freedom and justice, not for appeasement?

Mr. Hogg: My hon. Friend puts his point robustly, as is his wont. The purpose of the invitation is to ensure that Saddam Hussein learns for himself that the United States and her allies will carry the military burden of this business, if it needs to be carried. We are determined to do what has to be done to ensure full compliance with the Security Council resolutions. At the same time, we are anxious to avoid war if at all possible. Therefore, the invitation is designed to make sure that there is no misunderstanding on the part of Saddam Hussein.

Mr. John Evans: If the Bush initiative is not successful and hostilities break out in the Gulf, does the Minister accept that many thousands of British citizens working in other Arab countries could face


some difficulties from local groups hostile to the west and sympathetic to Iraq? Does he accept that one group of people who could be placed in some jeopardy are British lecturers and teachers in Arab universities? Will he consider instructing British ambassadors to seek assurances from other Arab countries that their welfare, property and lives will be safeguarded in those circumstances?

Mr. Hogg: The hon. Gentleman makes an important and relevant point. We are urgently considering how best to ensure the safety of British citizens in the middle east.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that this is a private notice question and that we are to have a statement after it. I shall call two more Members from each side, but then we must move on.

Mr. John Wilkinson (Ruislip-Northwood): My hon. and learned Friend alluded to the possibility of unfinished business being on the agenda of a middle east conference in the event of an Iraqi withdrawal from Kuwait. Will he comment on the Government's view of the statement made today by the Israeli Government that President Saddam Hussein should withdraw from office?

Mr. Hogg: It would be a very good thing if he withdrew from office. It would be an even better thing if he withdrew from Kuwait.

Ms. Clare Short: The link between the situation in Kuwait and that of the Palestinians is not Saddam Hussein but international law, which is being breached in both instances. We must take a firm stand on the settlement of the Palestinian question, because that is the way to make the middle east safe. Our Government have behaved like a poodle for the United States. To achieve a proper settlement, we need a separate European initiative in which European Governments are not implicated in backing the intransigence of Israel in the middle east. That includes not only an Iraqi withdrawal from Kuwait but a long-term peaceful settlement in the middle east rather than a horrific war.

Mr. Hogg: There is neither logic nor morality in arguing that there is some link between resolution of the Palestinian question and securing the withdrawal of Iraqi forces from Kuwait. Once Iraq has unconditionally

complied with the United Nations Security Council resolutions, we will return to the unfinished business that has been discussed in the Chamber today.

Mr. Conal Gregory: Will my hon. and learned Friend confirm that we are doing our utmost to stop sanction breaking, which many newspapers are reporting is happening in some areas? Also, will he give succour to the families of hostages that a financial lifeline will be supplied by the Government in the event of their being unable to make mortgage and other payments, which, as we approach Christmas, could cripple families?

Mr. Hogg: I entirely agree with my hon. Friend about the plight of the hostages. I have considerable admiration for the courage and fortitude shown by the families of the hostages. I am glad to say that we have been able to do much to assist them. We have close contacts with them, not least through the family support group, with which my hon. Friend is closely associated.

Mr. Charles Kennedy: May I underscore the plea that has just been made on behalf of the hostages? May we have an assurance that, in this welcome initiative, the Government will stress to the President of the United States the need to put them at the top of the agenda? As the Minister rightly made it clear that the United Nations resolutions will be adhered to and will be stressed by the President, the word "negotiation" will not be appropriate in the context of the meeting, but what status does the Minister foresee for the meeting? Does he regard it as a dialogue or an opportunity for the position of the United Nations to be rehearsed directly to President Hussein?

Mr. Hogg: The hon. Gentleman is entirely right to emphasise the great importance that the Government attach to the early release of the hostages, and we have made that plain on every possible occasion. The hon. Gentleman referred to the invitation from the United States Government. I agree with him that to use the word "negotiations" is misleading. The purpose of the invitation is to make plain to Iraq the fact that the Security Council is intent on securing full compliance with the resolution and that those countries that have deployed forces in the middle east stand behind that resolution. If Iraq does not comply unconditionally with the terms of the resolution, that country will be exposed to the risk of war, and Saddam Hussein needs to understand that.

Iraq (Exports)

The Minister for Trade (Mr. Tim Sainsbury): With permission I should like to make a statement about exports to Iraq.
The Exports of Goods (Control) Order 1987 specified the goods the export of which would require a licence from the Secretary of State for Trade and Industry in 1988. The export of any military equipment required a licence. The order specified a range of equipment that is capable of being used for either military or civil purposes which also required a licence. Decisions on export licences applications are taken on a case-by-case basis.
My right hon.and learned Friend the Member for Surrey, East (Sir G. Howe), the then Foreign Secretary, set out the guidelines applying to exports of defence equipment to Iraq in a written answer on 29 October 1985, at column 450 of Hansard. Those guidelines state that we should maintain our consistent refusal to supply any lethal equipment and that, subject to that overriding consideration, we should attempt to fulfil existing contracts and obligations. However, the guidelines said that we should not in future approve orders for any defence equipment which, in our view, would significantly enhance the capability of Iran or Iraq to prolong or exacerbate the conflict between them.
It is clear whether or not most goods fall within the guidelines. There is, however, a range of equipment—particularly machine tools—which could have either a civil or military use and for which a licence will be required.
When appropriate, both the Foreign and Commonwealth Office and the Ministry if Defence are consulted before a decision is made by my Department on whether a licence will be granted.
Applications for export licences are made on a form that requires the exporter to state both the customer and a description of the equipment. It is normal practice for it to be emphasised to those applying for licences that they should make clear the purpose for which the equipment is to be used.
In early 1988, following representations from a number of hon. Members on both sides, of the House, my hon. Friend the Minister for Defence Procurement, the then Minister for Trade, agreed to meet the Machine Tool Technologies Association to discuss the application of the guidelines in relation to the export of machine tools to Iraq.
My hon. Friend the Minister for Defence Procurement strongly denies the interpretation put on the remarks alleged to have been made by him in The Sunday Times article. I will not comment on the record of the meeting kept by the MTTA, which was not sent to my Department at the time, as I am advised that to do so might prejudice possible proceedings.
As the House will be aware, some matters concerning the licences granted to Matrix Churchill and the exports carried out by that firm to Iraq are now the subject of investigation by Customs and Excise. These investigations are carried out by Customs and Excise under the Customs and Excise Management Act 1979. It would therefore be improper for me to comment on those matters or to say anything that might prejudice any proceedings.

Mr. Martin O'Neill: That insignificant statement will surprise and satisfy no one. It will certainly not satisfy the readers and reporters of The Sunday Times It will not satisfy the arms manufacturers who were first encouraged to sell arms to Iraq and who now have the possibility of prosecution hanging over them. It will not even satisfy the Minister for Defence Procurement over his role in this sorry affair.
Perhaps the Minister will confirm that there have been arms sales to Iraq, involving battlefield radar supplied by Thorn/EMI, tank-tracking equipment supplied by Bimec Industries, engineering equipment for mortar shells supplied by Wickman Bennett, as well as many parts of the so-called supergun which required explosive retardants and which got through the gap.
Will the Minister say more about the status of the meeting that took place on 20 January 1988 between the then Minister, the hon. Member for Plymouth, Sutton (Mr. Clark), and representatives of the Machine Tool Technologies Association? Did the then Minister advise them about filling in forms? Did he tell them to couch their applications in a manner designed to emphasise—and therefore by implication to mislead the other Departments—the peaceful aspects of the deals?? Did he warn them of the need for speed to avoid bureaucratic—Foreign Office—interference because of external, namely United States, considerations?
Does the Parliamentary Under-Secretary appreciate that his totally inadequate explanation and his spurious distinction between lethal and non-lethal equipment make a mockery of the explicit instructions set out in December 1984 and the guidelines announced by the then Foreign Secretary on 29 October 1985? Is he aware that those statements were reinforced by the then Prime Minister on 10 November 1989 when she said, in reply to a question by my hon. Friend the Member for Workington (Mr. Campbell-Savours):
supplies of British defence equipment to Iraq and Iran continue to be governed by the guidelines introduced in 1985,"—[Official Report, 10 November 1989; Vol. 159, c. 800.]
Does the Parliamentary Under-Secretary not appreciate that the casuistry of those concerned will continue to be exposed and that the Government will not get away with selling what, if it is only the straw, is the straw with which the Iraqis are making the bricks which will be built up against our troops in the Gulf if it ever comes to action? Does he realise that, if people have been distorting, bending and falsifying the rules and hiding behind commercial constraints when they choose to ignore questions from hon. Members, they will be found out and the wrath of the British people will be heaped on them as a consequence?

Mr. Sainsbury: rose—

Mr. Anthony Beaumont-Dark: On a point of order, Mr. Speaker.

Hon. Members: Is it a point of order?

Mr. Speaker: Order. I cannot know whether it is a point of order until I have heard it.

Mr. Beaumont-Dark: On a point of order, Mr. Speaker. The hon. Member for Clackmannan (Mr. O'Neill) said that the statement would not satisfy the readers of the Sunday Times. Is it not—

Mr. Speaker: No. That is not a point of order; it is a point of argument.

Mr. Sainsbury: When I was Parliamentary Under-Secretary of State for Defence Procurement I occasionally had opportunities to debate with the hon. Member for Clackmannan (Mr. O'Neill). I recall that he was very hard to satisfy. However good the news one announced, he would find cause to criticise it. Just for the record, may I say that I have moved on and I am now Minister for Trade, not a Parliamentary Under-Secretary of State.
The hon. Member for Clackmannan is an Opposition Defence spokesman and he is perhaps not as familiar with the procedures for export licensing as he might be were he Opposition spokesman on Trade and Industry matters. It is the exporter's responsibility to provide information to the Department which will enable the department with responsibility for issuing licences to determine whether the equipment concerned qualifies for a licence.
The guidelines to which the hon. Gentleman referred are clear. They were set out by my right hon. and learned Friend the hon. Member for Surrey, East (Sir G. Howe) on 29 October 1985, and since then they have been scrupulously and carefully followed in the issuing of licences. No other country has such a careful method for scrutinising applications for export licences and for controlling exports.

Mr. Michael Grylls: Does my hon. Friend agree that it would be unwise for hon. Members to pursue a witch hunt in a vacuum when we do not know the facts? If any firm has deliberately broken the rules, it will be prosecuted by the proper authorities. We should not have a witch hunt against many firms which, over the years, with the best of good will, have genuinely tried to maximise their exports for the good of the country.

Mr. Sainsbury: I agree that it would be most unwise for any of us to make statements or allegations which might prejudice the outcome of proceedings. Surely it would be in the interests of both sides of the House that, if proceedings are brought, they are not frustrated by comments made in the House.

Mr. David Winnick: Is the Minister aware that his statement will not satisfy most hon. Members and that it will certainly not satisfy public opinion? Is he aware that the most serious allegation 3 have been made that, in the months and years leading up to the invasion of 2 August, there were exports to Iraq which helped to build that country's war machine and that there was much complacency on the part of the Government and on the part of the Minister who was named in The Sunday Times report? Does the Minister really believe that his feeble excuses today will satisfy the House and the country?

Mr. Sainsbury: When it comes to being hard to satisfy, the hon. Member for Clackmannan (Mr. O'Neill) is certainly put in the shade by the hon. Member for Walsall, North (Mr. Winnick). The exports to Iraq in the period to which the hon. Gentleman referred were made strictly in accordance with the criteria to which I have referred. I hope that the hon. Gentleman heard what they were. They barred the export of lethal equipment or equipment that would significantly enhance the capability of Iraq or Iran to carry on their conflict.

Mr. Roger King: My hon. Friend mentioned that he had received representations from both sides of the House. Would he care to elaborate a little on the role of the Labour party?

Mr. Sainsbury: I shall have to write to my hon. Friend to let him know the full list of hon. Members who wrote to my predecessor seeking meetings on behalf of the Machine Tool Technologies Association. I assure my hon. Friend that the meeting that took place and which was referred to in the article in The Sunday Times arose as a result of those representations.

Mr. Ted Garrett (Walsend): I must declare two interests. First, I am a member of the Amalgamated Engineering Union and, secondly, since 1968, I have advised the Machine Tool Technologies Association. Many members of my union worked on the machines that are now in Iraq and they would deeply resent any imputation that they were guilty of helping Iraq to protect—[Interruption.] Let me have my say.
It is wrong to pillory the management of the machine tool industry—men who have served their apprenticeships, gone through the ranks and worked to produce exports for the industry and for the country—to the extent that the Minister alleges that they might face charges in court. The Minister should state clearly that it is a tale of confusion between the Department of Trade and Industry, the Foreign and Commonwealth Office and Customs and Excise. None of them has got its act together, and that is why the article appeared in the "Insight" column of The Sunday Times. It is wrong for there to be public recrimination on an issue which the Government should admit would not have come forward had there been co-ordination in their activities and information to the machine tool industry.

Mr. Sainsbury: The hon. Member is a strong supporter of the machine tools industry. It is a significant industry, with a good export record, and it provides much employment. I do not wish to comment on the matters to which the hon. Gentleman has referred because—I apologise to hon. Members for it and hope that they understand—I must fall back on saying that it would not be proper to comment on matters that are currently subject to investigation under the Import, Export and Customs Powers (Defence) Act 1939.

Mr. Derek Conway: Does my hon. Friend recall that, during the Iran-Iraq conflict, when a company in my constituency wanted to supply engines for recovery vehicles, the application went to a Cabinet sub-committee and was declined in case the engines could be put to military use? Is that not a clear example of the Government abiding by the regulations? Bearing in mind what the hon. Member for Wallsend (Mr. Garrett) has said, it will come as a great surprise to the House that the Liberal Democrat and Labour parties are attacking the machine tools industry in this way—[HON. MEMBERS: "Not true."] That has to be the case, despite Opposition Members' protests. If exporters are misleading a Government Department, that is a matter for the courts, not for the bear garden of Opposition Members.

Mr. Sainsbury: I do not remember the particular application to which my hon. Friend refers. I believe that it would have come before one of my predecessors. However, I can confirm, as I have done already, that there


were guidelines which were well known to both exporters and the House. I can assure the House that those guidelines were scrupulously followed and that the Foreign and Commonwealth Office and the Ministry of Defence, when appropriate, were consulted before my Department issued or refused a licence application.

Mr. Charles Kennedy: Does the Minister accept that his statement is nothing less than a Sir Humphrey classic in its desire to obscure, confuse and cloud the issues??While accepting that he does not want to prejudice possible legal proceedings, surely the best way not to do so is to come forward this afternoon with the fullest possible disclosure of the facts, but that is what the hon. Gentleman has singularly failed to do. Why was not a minute of the meeting between the association and the Minister, to which he referred in his statement, not sent to his Department, given that his Department would then have been responsible for the granting of subsequent licences arising from the context of the discussions at that meeting? Is it not a ludicrous failure in the civil service, where the Government are policing their own policy?

Mr. Sainsbury: As I said in my statement, it would not be right for me to comment on the record that was kept of the meeting by the Machine Tool Technologies Association. I am advised that to do so might prejudice possible proceedings. I realise that the hon. Gentleman finds that unsatisfactory, but when he asks me to come to the House to make the fullest possible statement, he is asking me to do just that—to make a statement that would prejudice possible proceedings, and that I do not intend to do.

Mrs. Alice Mahon: On a point of order, Mr. Speaker. Is it proper for the Minister to claim sub judice when no proceedings have been started, which is what he has been doing throughout?

Mr. Speaker: Order. I did not hear the Minister claim sub judice—[HON. MEMBERS: "He did."] Well, it is up to him how he answers the question. The case is not sub judice, and I did not hear him claim that it was.

Mr. Peter Bottomley: Is not one of the differences between Iraq and this country the fact that a newspaper here can raise such issues? Is not one of the differences between this country and Iraq the fact that Parliament can respond to it? Is not one of the differences between Iraq and this country the fact that the trade association or The Sunday Times could publish the whole of the note that was made by the trade association, so that the rest of the House can make either the same judgment as the newspaper or a different one?

Mr. Sainsbury: My hon. Friend draws attention to what some of us would regard as the less important differences between our country and Iraq. I rank human rights as the most important. However, these are significant differences, and my hon. Friend makes a good point.

Mr. Dave Nellist: Leaving aside how British troops in the Gulf must now feel towards the hon. Member for Plymouth, Sutton (Mr. Clark), and the fact that the occasion of this statement is not only a good occasion for his resignation but another

good reason for not drifting senselessly towards war in the Gulf, how can this Minister now face the 89 workers and their families from Matrix Churchill in Coventry who this weekend were given notice of their redundancy, which will take effect four weeks today? The Minister seems to have done nothing in the five weeks since I led a deputation of workers to him in his office. Is it not a fact that his Department encouraged general exports to Iraq, including machine tools and lathes from Matrix Churchill and Wickman Bennett?
Is it not a fact that in November 1988 the former Secretary of State for Trade and Industry announced £400 million in credit to enable those exports to be made and that 10 days before the present Secretary of State for Health said in the House that the Iraqis were using chemical weapons to bomb the Kurds? Is it not a fact that the Department allowed the Iraqi secret service to take over Matrix Churchill? Is it not also a fact that, after sanctions were imposed in August, the Government washed their hands of the responsibility for workers in Coventry and elsewhere? As it is all the Government's responsibility, should not the Minister announce today that the Government will take over the firm, take it out of the hands of the Iraqi secret service, and guarantee the jobs and livelihoods of the workers in Coventry and elsewhere?

Mr. Sainsbury: Job losses and redundancies are always a matter for regret and I am sorry to hear what the hon. Member for Coventry, South-East (Mr. Nellist) said about some of the workers in Matrix Churchill. The hon. Gentleman read out a list of "facts", most of which I did not recognise as facts.

Mr. John Bowis: Will my hon. Friend pay attention to the wise words of the hon. Member for Wallsend (Mr. Garrett), and not the synthetic row being artificially created by the main Opposition? Does he agree that the gist of the Opposition's argument seems to be that any type of export from this country could conceivably, some day, somehow, be used for aggressive purposes and that their main accusation against my hon. Friend the Minister for Defence Procurement is that he did his best, within the law, to promote British trading interests? Will the Minister confirm that British policy on lethal weapons has not and will not change?

Mr. Sainsbury: I can confirm that our general policy has not changed and that our policy on the export of military equipment and arms to Iran and Iraq was clear and has been adhered to. The most that we can do at any time is to make the most informed, cautious and considered judgments in the light of all the information available. I doubt whether any other country has a more comprehensive and rigorously enforced system of defence export control.

Mr. Max Madden: Does the Minister accept that it is the Government, not the machine tool industry, who are in the dock today? Were any private officials present at the meeting between the Minister and the Machine Tool Technologies Association? If there were, does their minute of that meeting coincide with the minutes published this weekend in The Sunday Times?

Mr. Sainsbury: I can confirm that it was a normal meeting and officials were present, as normal. The hon. Gentleman asked who was in the dock. Nobody is in the dock, and it is important to keep that in mind. I am not


prepared to make statements that might prejudice any proceedings that may be brought because, as the hon. Gentleman is aware, Customs and Excise is at present investigating certain matters, as I said in my statement. I should have thought that the hon. Gentleman would recognise that it would be unwise to make statements that might prejudice any proceedings arising from those investigations.

Mr. Alan Williams: The Minister has admitted that, as one would expect, his officials were present at the meeting. Is it not a fact that the Department's normal practice is to keep its own minutes of such meetings? Has he not said that the meeting was not of a confidential nature but was to clarify already published guidelines to industry, so there was no secrecy in relation to the meeting or the minutes? How do his Department's minutes differ from those of the trade association?

Mr. Sainsbury: I hope that I made it clear to the House that the meeting was not to discuss any specific licence application but was held with the trade association to discuss the application of the guidelines in relation to the export of machine tools to Iraq. We seem to be talking about two entirely different issues.

Mr. Beaumont-Dark: Does my hon. Friend accept that, in the cut and thrust of politics, we are all used to saying things about each other as a matter of course, but for Opposition Members to suggest that for some sordid reason, my hon. Friend the Minister for Defence Procurement would be willing to put British lives at risk for his personal interest is unworthy of them? Right from the word go, the Labour case has been that this will not satisfy readers of The Sunday Times. Nothing will satisfy The Sunday Times short of seeing blood on the sword.
This House needs to state clearly that we do not believe that any member of Her Majesty's Government, Labour or Conservative, would ever sell the people down the river. I would not—[Interruption.]—I would not believe that of a Labour Minister or of a colleague. Surely none of us should laugh at the honour of our people. Accusing the Minister of knowingly selling arms to an enemy of this country is something of which the Opposition should be thoroughly ashamed.

Mr. Sainsbury: I am grateful for my hon. Friend's remarks and for his reminder that in the heat of the moment things may be said about hon. Members which perhaps should not be said. In the Department of Trade and Industry we endeavour both to promote exports and to stay strictly within the clear guidelines controlling defence exports.

Mr. Martin Flannery: It ill becomes the Conservative party to engage in self-righteous indignation merely because hon. Members are honourably questioning certain events and want to know the truth. We know from long experience that war is terrible but also that it is terribly profitable to some people. If we admitted that we supported Saddam Hussein throughout the war against Iran, that might clear the air a bit.
The Minister above all people should understand this: he comes of a family that understands trading. I do not impute any ill motives to him. Only recently we were found to be clearly guilty, and I told the Prime Minister that she did not seem to understand the difference between a gun

barrel and an oil pipe. We were found to be exporting gun barrels to Iraq, so why do Conservative members quibble about our honourable anxiety about what is going on?

Mr. Sainsbury: The hon. Gentleman was slightly short on specific questions, but he seemed to suggest that we had exported lethal equipment and supported Iraq by so doing. I assure him that we have not been exporting lethal equipment. I remind him that it is the responsibility of the exporter to fill in the export licence application form, and to state, under CS, the
nature of the ultimate user's business",
and, under C6, the
precise purpose for which the goods are to be used".
If that information is not accurate, wrong decisions can be reached.

Mr. Peter Viggers: Does my hon. Friend share my confusion about the message that seems to be coming from the Opposition? Does he agree that, like it or not, the manufacture and export of military equipment and of equipment that could have some military application are important to this country? Does he recall that, in a constituency manifestation and in a previous manifestation as a Minister, I have received vigorous representations from trade union leaders who are anxious that the scrupulous attention paid by the Government to the purpose of exports should come down on the side of the workers and their unions? Does my hon. Friend therefore agree that scrupulous tests are applied and that there does not seem to have been any impropriety in this matter?

Mr. Sainsbury: I entirely agree. It is incumbent on any country with defence exports to ensure that there are strict controls and that they are well enforced. As my hon. Friend well knows, all countries have the right to self defence. Under article 51 of the United Nations charter, they are free to acquire defence equipment, and in many cases it would be a gross waste of resources if they tried to provide their own. The defence export industry is important and provides employment for at least 100,000 people. We should be careful in criticising it as if any defence export were wrong.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that this is a fairly heavy day, with two Second Reading debates. I shall call four more hon. Members and then we must move to the next business.

Mr. Greville Janner: Does the Minister recall that there was almost precisely the same row at the time of Idi Amin over the export of telephonic equipment? Have the Government learnt nothing from this? Is it not true that licenses were granted when they should not have been, that this was either deliberate or negligent, and that either way the Minister of State for Defence Procurement should resign?

Mr. Sainsbury: I do not recall the export of what the hon. and learned Gentleman called telephonic equipment at the time of Idi Amin. I assure him that we continually review our procedures for controlling defence exports. The procedures are applied most scrupulously and carefully. As he will see from recent events, we have further reviewed


and improved those procedures, and we are open to further suggestions about anything that can be done to make them even better than they are.

Mr. Richard Caborn: Will the Minister please answer three questions? First, when was his Department informed about Project Babylon, which was in 1988? Secondly, when was his Department informed about Project 839, which has been referred to a number of times through the supergun affair? That concerned an order not for the supergun but for 75 major field guns. I understand that the intelligence service believes that three of those guns have been installed. Thirdly, will there be a change in the procedures for applying for export licences by saying that no licence will be granted unless the end use of all components and manufactured goods is contained in the export licence form that the Minister read to the House?

Mr. Sainsbury: As I have said, it is for the exporter to provide the information that is necessary for the Department to determine whether a licence is required and whether it will be granted. Sometimes it is necessary to ask for additional information, more details of specifications and other matters connected with the application. If the exporter fails to provide accurate information, that part of the form which draws attention to the fact that misleading or wrong information may give rise to proceedings comes into effect. That warning is given on many Government forms.

Mr. Dennis Canavan: As the Minister of State for Defence Procurement insists on denying the Sunday Times allegations, which if true would surely be a resignation issue, may we assume that he will take legal action against the Sunday Times?

Mr. Sainsbury: As I said in my statement, my hon. Friend strongly denies the interpretation put on the remarks alleged to have been made by him in the Sunday Times article.

Mr. Harry Barnes: I am probably the only Member who at one time had a job filling in forms in Iraq. That was during my national service. What has happened to Britain's so-called arms embargo in connection with trade fairs in Iraq which we have supported and which have been held since the embargo? How has Britain been involved in those trade fairs? Have we been attempting to sell dual purpose machine tools?

Mr. Sainsbury: The hon. Gentleman speaks about the "so-called" embargo. I assure him that it is an embargo

and that, under the terms of the United Nations mandatory sanctions order no civilian or military exports, apart from medicines, are being made to Iraq and Kuwait. He asked about trade fairs since the embargo came into effect. If there have been any such trade fairs, I assure him that there have been no British exhibitors and no support from my Department.

Mr. O'Neill: Does the Minister not realise that no Opposition Member objects to the production of machine tools or to the Machine Tool Technologies Association meeting the Minister? We object to Ministers conniving with exporters to bend the rules to afford trading with Iraq. Until we get a clear indication of where the Minister's minute deviates from that of the trades association, we will continue to push this matter. We will not be satisfied by the use, or abuse, of the sub judice rule. We recognise that legal action may well be brought, but that threat cannot hang indefinitely. As we come nearer to 15 January, right hon. and hon. Members will become more and more anxious about what has or has not been exported to Iraq, and for what purpose.
We give notice that we shall seek clarification in the light of any legal proceedings that have or have not been instituted. If legal proceedings have not been brought, we shall be anxious for the Minister to clarify the matters on which at present he feels incapable of enlightening the House.

Mr. Sainsbury: Perhaps I could clarify the point about the sub judice rule. I did not at any time refer to anything being sub judice. [Interruption.] I chose my words carefully, and I shall repeat them. I pointed out that the exports carried out by Matrix Churchill to Iraq and some of the licences granted were now the subject of investigation by Customs and Excise, and it would therefore be improper for me to comment on those matters or say anything that might prejudice any proceedings. That is not the same as the matter being sub judice. I hope that the hon. Gentleman agrees—presumably this would be in conformity with his views—that, if anything improper had occurred and it was decided that there should be proceedings, we should not say anything that might prejudice those proceedings.
The hon. Gentleman asked about the note of the meeting. As he well knows—I think that he should well know—it is not the custom to disclose such working papers. I note the words that he said in support of the machine tool industry, and I am sure that it was glad to hear them. I was certainly glad to hear them. We continue to hope that it will be successful in exporting machine tools for civilian use to all parts of the world where such exports are permitted.

Points of Order

Mr. Tam Dalyell: On a point of order, Mr. Speaker. During the statement by the Foreign Secretary on Wednesday 28 November, in column 871 of Hansard, I suggested that the right hon. Gentleman might not have done his national service. The right hon. Gentleman has written me a courteous letter to point out that he had done his national service with the Royal Artillery from July 1948 to September 1949. I hope that he will accept my apologies for any suggestion to the contrary.

Mr. Harry Ewing: On a point of order, Mr. Speaker. I wish to clarify the old point about the sub judice rule before the House gets itself into some difficulty. Is it the case, Mr. Speaker, that it is for you to rule when a matter is sub judice, and that in the past you have always ruled that matters become sub judice only when a date has been set for the proceedings to begin? Is it right that it is not for Ministers or any other right hon. or hon. Member to decide that a matter is sub judice? Surely it is a matter that is entirely for the Chair.

Mr. Dave Nellist: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order.

Mr. Nellist: It is on the point that my hon. Friend has raised.

Mr. Speaker: Order. I do not need a further point of order, because I can deal with the matter that the hon. Minister for Falkirk, East (Mr. Ewing) has raised.
The hon. Gentleman is absolutely right. I said that the matter under discussion was not sub judice. I think that the Minister made that clear in his final comment.

Mr. Nellist: On a point of order, Mr. Speaker. I wondered whether you would take the opportunity, perhaps through one of the channels that are available to you, to remind Ministers for the future that, if investigations are taking place, as the Minister for Trade

said in his statement, that is entirely different from the point raised by my hon. Friend the Member for Falkirk, East (Mr. Ewing) about court dates or court actions. In this instance, no charges have been laid against anyone. It was wrong for the Minister carefully to choose his words and effectively to produce a smoke screen to stop hon. Members asking questions which otherwise he would be obliged to answer.

Mr. Jeremy Corbyn: On a point of order, Mr. Speaker. The statement on arms sales raised serious and important questions. Have you had any request either for a debate or a statement on the principle of selling lethal weapons to repressive regimes, which leads to the death of many innocent people?

Mr. Speaker: I have not had such a request, but that is exactly the sort of subject that hon. Members might well choose to debate on a private Member's motion day, or even in an Adjournment debate.

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. Will you condemn the hon. Member for Coventry, South-West (Mr. Butcher) for alleging today on radio in the west midlands that I had irresponsibly tabled questions last year linking Matrix Churchill to Iraqi intelligence? I understand that some concern about that is being expressed in the west midlands.

Mr. Speaker: I did not hear that radio broadcast, and I do not know anything about the matter.

Mr. David Winnick: Did you not listen to west midlands radio news?

Mr. Speaker: That was not possible.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the Police and Criminal Evidence Act 1984 (Codes of Practice) (No. 2) Order 1990 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Chapman.]

OVERSEA SUPERANNUATION BILL

Ordered,
That the Oversea Superannuation Bill be referred to a Second Reading Committee.—[Mr. Chapman.]

Orders of the Day — Community Charges (Substitute Setting) Bill

Order for Second Reading read.

Mr. Speaker: I have not selected the amendment in the name of the leader of the Liberal Democrats.
I remind the House that the Bill is very narrow. The wider implications of the community charge can be debated during the debate on an Opposition motion on Wednesday.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): I beg to move, That the Bill be now read a Second time.

Mr. Jeremy Corbyn: On a point of order, Mr. Speaker. I am amazed, as I am sure you are, that the Secretary of State is not introducing the Bill, which is the earliest opportunity for him to explain what he plans to do about the poll tax.

Mr. Speaker: The choice of Minister to introduce a Bill is not a matter for me. On this occasion, it is the hon. Member for Enfield, Southgate (Mr. Portillo), and that is quite in order.

Mr. Portillo: It may be helpful if I reiterate that, on Wednesday of this week, the House will have the opportunity to discuss the community charge on an Opposition motion. I look forward to that.
Today, I bring before the House a short technical Bill. It is not about the community charge in general. It is not even about the capping of local authority spending in general. It is about ensuring that, when a local authority has been capped, the reduction in spending that is required is passed on in full to the community charge payer.
I should have thought that such a proposal would command general support in the House. Even those who are opposed to the community charge, even those who are opposed to capping, should not, I would think, want to oppose passing on reductions in spending to the people. Once the reductions in spending have been required and made, it is mere cussedness to wish that the local people nonetheless should be denied the full benefit in the form of lower charges.

Mr. John Fraser: Last year I asked the then Secretary of State whether capping expenditure equated with capping the poll tax charge, and I was given the wrong answer. The effect of the Bill will be that, if the rate of collection of the poll tax is less than the Minister anticipates, there will be a further cut in services based on low collection levels. Will the Minister have his mind on the budget, or will he have it on the level of the poll tax charge? They are two separate matters.

Mr. Portillo: As the hon. Gentleman rightly said, my right hon. Friend the Secretary of State can bring the cap to bear only on the budget. Non-collection and the estimate of the rates are matters that a local authority must bear in mind when it sets its budget. A local authority cannot, in the middle of a year, alter its estimate of what

the collection should be and ask for more money. The Bill will put right a loophole in the process, in a way that I shall explain later.

Mr. Dave Nellist: I have asked the Minister's Department very many questions during the past three years, in an attempt to ascertain what estimates the Department was using for the non-collection or the non-payment of the poll tax. During all that time, I was told that it was impossible to make such estimates. However, on 26 November, the Department at last gave me the figures, albeit missing out Birmingham, Leeds, Manchester, and half a dozen of the London boroughs where non-payment is highest.
The figures show that, as of 30 September, Lambeth had collected only 41·5 per cent. of its poll tax—in other words, almost 60 per cent. had not been collected. Is not the whole essence of the Bill based on the fact that the Department said that non-payment should be at about 5 per cent.—that is the capping criterion—while Lambeth said that it expected it to be about 15 per cent.? That is why it went to court. On the figures that I have at last been given, is not Lambeth much nearer than the Department to the true position?

Mr. Portillo: The Department believes that community charge collection should be 100 per cent., and makes no allowance for non-collection. It is open to individual local authorities to make estimates of non-collection at the beginning of each year. Once a local authority has done that, it will not be able to change its mind halfway through the year, come back to the Department and ask for more money. But if, at the end of a year, the local authority finds that its collection fund is in deficit, it will be open to it the following year to make an estimate not only of the non-recovered amount but the collection rate in the second year, in the light of its experience the first year.

Mr. Andrew Mitchell: Before any right hon. or hon. Member is seduced by the eloquent words of the hon. Member for Coventry, South-East (Mr. Nellist) on the difficulties that Lambeth faces with non-collection, will my hon. Friend the Minister remind the House whether that council encountered any difficulty collecting rates? How is Lambeth getting on with the job of collecting last year's rates?

Mr. Portillo: As my hon. Friend implies, there has really been no change. Lambeth had extraordinary difficulty collecting rates, and I believe that years of back payments are still due to it. Its relatively poor performance in collecting the community charge is nothing new, but appears to be a continuation of the council's incompetence in the days of rating.

Mr. Nellist: I cannot allow that remark to go by. How does the Minister explain the situation in Tory Bath, whose Member of Parliament is the former Secretary of State for the Environment? Bath's collection rate so far this year is only 77·1 per cent. Is it not the poll tax, and the fact that millions of people have been made poorer by it, that makes collection so difficult, rather than the inherent inability of local councils to manage their own affairs?

Mr. Portillo: As I understand the hon. Gentleman, Bath is doing 30 per cent. better than Lambeth—which, six months into the year, marks a significant improvement in performance. No doubt Bath will ensure by the end of the


year that it issues demand notices and takes to court people who have not paid—and in that way gets the collection level as close to 100 per cent. as it possibly can.

Mrs. Alice Mahon: What was the collection level in other Tory boroughs under the old rating system? The problem is not one that affects just Labour authorities, as the Minister well knows. Perhaps the Minister will give the House comparative figures for collection levels under the old rating system and the poll tax.

Mr. Portillo: Most authorities managed to achieve collection levels of as high as 98, 99 or even nearly 100 per cent. under the old rating system, and that should be their ambition with the community charge. I am sure that many councils will achieve collection rates in the 90 to 100 per cent. range. However, Lambeth's collection record was pretty poor even under the old rates system, and the borough is still chasing those arrears.

Mr. Peter Bottomley: Are we not being slightly distracted? Labour Members appear to be suggesting that, if people who can afford to pay do not do so, the burden should be carried by those who do pay.

Mr. Nellist: That is not what we said.

Mr. Bottomley: The hon. Gentleman appears to prefer shouting about the issue to debating it. He says, "That is not so." Perhaps he will try telling that to Labour councillors in Greenwich, who could pay the community charge but do not pay, and who lead anti-poll tax demonstrations.
Are Labour Members seriously arguing that each rating authority, as it was, and each community charge authority, as it is now, ought to be allowed to change its estimate of community charge income between the time that it sets its budget and at some subsequent point in the same year? If that is what Labour financing is about, the longer we can put it off nationally, the better.

Mr. Portillo: I cannot say whether that is what Labour Members believe, but perhaps they will clarify that aspect when they make their speeches.
As to non-collection, it is not clear to me whether Labour is gleeful about non-collection—which is what one might think, given that 28 Labour Members are refusing to pay the community charge—or upset because non-collection reduces the services that local authorities can provide. That is an extraordinary dilemma in Labour policy between members of the party's Front Bench and Back Benches.

Mr. Kenneth Hind: Does my hon. Friend recall the 1986 Comptroller and Auditor General's report, which examined the efficiency of a number of Labour-controlled inner London boroughs—

Mr. Deputy Speaker (Mr. Harold Walker): Order. Mr. Speaker has already pointed out that the Bill addresses itself to a very narrow issue, and right hon. and hon. Members must not allow the proceedings to develop into a general debate about the community charge.

Mr. Hind: I am obliged to you, Mr. Deputy Speaker. I shall keep to the point. The efficiency displayed by Labour London boroughs in both rates collection and management was questioned in 1986, so that problem has existed

in those councils for many years. Does my hon. Friend agree that Labour authorities throughout the country have long faced that difficulty?

Mr. Portillo: I will certainly re-read that report. Where the leader or councillors of a Labour-controlled authority refuse to pay, it is hardly surprising that the collection rate is lower than elsewhere.
It is unclear whether or not Labour will oppose the Bill. It would surprise me if it did, because Labour says that the charge is too high and claims to speak for the people who find it difficult to pay—yet Labour also defends to the last ditch a council's right to deny the community charge payer a reduction in his bill.
I described the narrow scope of the Bill, yet I realise that the House may want to broaden the debate to the extent that you, Mr. Deputy Speaker, allow that to happen. The house may want to know of the community charge review. On that I have nothing to add to what my right hon. Friend the Prime Minister has said. Whether my right hon. Friend the Secretary of State feels able to say more on Wednesday, we shall have to want to see.
The House may also want to discuss the theory and practice of capping. I hope that the whole House can agree on the need to contain public spending, of which local authority spending constitutes one quarter. On that, the Labour party is confused. Officially, it recognises, general terms, the need for restraint, in general—but of course, never in particular. It has no word of complaint about the enormous increases in local authority spending—up by one quarter in just two years. Indeed, authorities are saying that, next year, they need to spend almost 50 per cent. more than they did only three years ago, yet the incomes of those who have to pay for local services have not risen by anything like that amount.

Mr. A. J. Beith: What has gone wrong to bring about the state of affairs that the Minister describes? The community charge system was meant to ensure that everyone would know what they were paying, and that they would not elect authorities that were likely to charge too much. Is there something wrong with the community charge system, or is there something wrong with the electoral system?

Mr. Portillo: I shall refer later to how accountability has shown itself so far, and how it will show itself in the future.
The Government have proposed paying an extra £3 billion to local government next year. The Labour party says that is not enough. That is its knee-jerk reaction. If we had proposed £13 billion or £30 billion, it would also have said that it was not enough. The fact is Labour will never commit itself to saying how much more the Government should pay. Still less does it say where the money would come from, or whether it would come from borrowing or some other form of taxation.
Labour has consistently opposed the Government's policy of increasing the accountability of local government to the electors. The Government believe that local authority spending—as a part of public expenditure—must be contained. Anyone who doubts that is living in fantasy. The more responsible parts of the Labour party know that perfectly well. Our approach to that need to limit spending operates through controls, improving accountability, and capping.

Dame Elaine Kellett-Bowman: I am sure that my hon. Friend is well aware of the appalling burden on the ratepayers of Lancashire because of its profligate council. Does he recall that a delegation came to see him about that and other matters? Also, is he aware that, when considering the Bill and other matters, the all-ages social index operates unfairly towards cities such as my own? Will he also bear it in mind—especially for Wednesday—that, if we were to alter the all-ages social index, and to propose that cities such as Lancaster should be able to opt out of the system and become county boroughs, we should all escape the scourge of councils like Lancashire county council?

Mr. Portillo: I received the delegation headed by my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) with pleasure the other day, and I am considering the points that she put to me, which will form part of the outcome of the settlement that the Government will announce in due course. The broader question takes us a little beyond the scope of the Bill, but both I and, I am sure, my right hon. Friend the Secretary of State, have heard what my hon. Friend has to say.
In an ideal world, capping would not be necessary. The community charge has undoubtedly greatly increased the pressure of accountability, as we saw last May in Brent, Harrow, Hillingdon, Ealing, Wandsworth, Westminster, Trafford, Derby and Southend. In all those places, Conservative councillors, who promised lower community charges and more efficient government, were returned.
However, in many places, accountability is still obscured. Transitional payments both to the individual and to local authorities will, for some years yet, distort the picture by reducing the charges that people have to pay. Many councils have yet to come up for election since the community charge was introduced, so that people have had no chance as yet to vote for or against particular levels of spending. The counties, for example, face no elections until 1993. In those places where there are two tiers of local government, people have not yet had time to become accustomed to the split between the spending accounted for by the county and that attributable to the district.
For all those reasons, accountability is for the time being blurred. The Government are therefore prepared to cap, both because of the need to control public spending, and as a means of providing a degree of protection for the hapless community charge payer against unscrupulous, wasteful and irresponsible local councils.

Mr. Allen McKay: The hon. Gentleman is talking about accountability, but does he not agree that it has been taken away? Local authorities, which are elected each year, are accountable each year for their policies but if accountability is moved to the centre, how can the local authority be accountable? Also, is it not a fact that, because of poll tax capping, the problems that people come to complain about in my surgery are not a result of the fact that the local authority is accountable but a result of the services that the authority is unable to provide because of its low standard spending assessment?

Mr. Portillo: As I was explaining, the question of accountability is distorted by heavy payments made to individuals and to local authorities. Constituents in Barnsley, in the hon. Gentleman's constituency, received considerable payments this year, by way of the safety net

and the low rateable value grant, which reduced the community charge in his area. Nonetheless, I am sure that his constituents are more than pleased to find that their community charge has fallen from £330, as proposed by the local authority, to £271, which is the substitute amount set after the cap.
Labour's environment team does not seem to believe that councils should be inhibited in any way in what level of tax they themselves raise. The hon. Member for Dagenham (Mr. Gould) once departed ever so slightly from this line, when he said that capping should be allowed "in extremis". But he has subsequently proved that that was a moment of absent-mindedness, and he is now firmly back in the "let it rip" camp. Labour's team oppose capping, and they are proud of it. They refuse to acknowledge the misery and financial hardship that the spend, spend, spend, tax, tax, tax policy implies for community charge payers. They show that they fail to grasp that local authority spending is part of public spending. I despair of being able to educate them myself, but I have hopes that the hon. Member for Derby, South (Mrs. Beckett) may yet make some headway.
In the Local Government Finance Act 1988, Parliament has given the Secretary of State powers to cap authorities whose budgets are in his opinion excessive, or which represent an excessive increase over the previous year. We used those powers this year to cap 21 councils. The legality of our use of those powers is not in doubt. Twenty authorities mounted challenges to what we had done; 16 of them pressed their challenges to the House of Lords, but at each stage the challenge to the legality of our actions were dismissed—in all by a total of 11 judges.

Mr. Richard Holt: Does my hon. Friend accept that the people of Cleveland are complaining bitterly about the lack of capping upon that spendthrift authority by the Government? It has just decided to spend a seven-figure sum on repainting all its fire engines orange, instead of red, to acquire a corporate image. If it had been rate-capped or community charge-capped, it would not have had the opportunity to waste that money.

Mr. Deputy Speaker: Order. I remind the House that Mr. Speaker pointed out that the scope of the Bill is very narrow.

Mr. Portillo: Nonetheless, I am deeply sympathetic to my hon. Friend, whose constituents face community charge bills of £421 and £429—very high community charges indeed—which are due to that level of overspending.
Haringey failed to reduce its community charge by the full amount of its budget. We challenged that decision in the courts, which held that Haringey's charge was unlawful.
Finally, we took action to force Lambeth to pass on to its charge payers the full reduction in the charge resulting from capping. The court held that, in the particular circumstances of this case, it was lawful for Lambeth to act as it had done, but the Lambeth case, to which this Bill is the response, did not call into doubt our powers to cap budgets, or the way in which we put the caps into effect. As I shall shortly explain, it related only to the question of what level of community charge should result from the cap.
If necessary, we will use our capping powers next year, including our power to cap excessive year-on-year increases, a course which was not open to us this year.

Mr. David Bellotti: Is the Minister aware that, while he is taking these powers—as he has confirmed he will continue to do—the contribution by the Government to county council finances in the east Sussex area which I represent, has gone down in the last 10 years—it used to be about 40 per cent. and it is now only 16 per cent? Is the Minister saying that there is a moral justification for taking such excessive powers against a council, when the Government are doing so little to help councils?

Mr. Portillo: When we recently announced that the weighting given to tourism in the standard spending assessments next year would be doubled, the local authority which benefited most was Eastbourne. So I must challenge what the hon. Gentleman has just said.

Mr. Bellotti: The hon. Gentleman has challenged me. Is he aware that the greatest part of the county council's expenditure is on education, that the reduction in central Government grant to county council expenditure has had a great effect upon our schools and that tourism is only a small percentage of our budget? Unless he does something about education, social services and housing, there will be no answer. Is he aware of all those things?

Mr. Portillo: If the hon. Gentleman felt so strongly about that, I am sure that he would have led a delegation to see Ministers during the consultation period—which, I am afraid, is now closed.
By announcing our intended capping criteria for next year in advance, as my right hon. Friend the Member for Bath (Mr. Patten) did in his statement on local government finance on 31 October, we have given councils the chance to decide for themselves. Any council which strays into being capped next year will have done so with its eyes open. I do not deny that our criteria are tough, but they are realistic and they are necessary. We will be putting a very great deal of extra money into local government next year, and we will not see it frittered away in unnecessary spending.
We shall, of course, consider carefully the individual circumstances of any authority which we propose for capping. There would, of course, be an opportunity for any authority which was designated to make representations about the level of the proposed cap. That is no mere ritual. What is perhaps more of a ritual is the list of horrors which each local authority trots out in its public presentation—the cuts which they claim to be the inevitable consequence of capping. The list always contains the most sensitive front-line services—never reductions in waste, or improvements in efficiency.
Time and again—from the earliest days of rate capping—such lists have been trotted out, but rarely, oh so rarely, do the predicted horrific consequences in reality occur. Indeed this year, in the middle of the capping process, one authority designated for capping—Hillingdon—changed control, from Labour to Conservative. The Labour administration of Hillingdon had claimed that the proposed cap was "totally inadequate to meet the needs of Hillingdon". What actually proved to be totally inadequate was the Labour administration. Three days later, they were thrown out of power. Under

the new management, Hillingdon was able not merely to accept the proposed cap but to set a budget significantly below the cap.
My right hon. Friend the new Secretary of State arid I stick firmly by the intentions for criteria laid down by my right hon. Friend the Member for Bath. Today, just as when he made that announcement, they remain the Government's proposed criteria for capping in 1991–92. Let no council doubt it for a moment.

Mr. Martin Redmond: Will the Minister confirm that, when an authority is capped, both manpower and services may be affected? Will he give a guarantee that any authority that—having been capped—falls foul of the law by not providing what is legally required of it, because it no longer has the necessary resources, will be indemnified against any court action?

Mr. Portillo: I have already referred to the opportunity that exists for all local authorities to make representations if they are opposed to capping. During such meetings, authorities often mention the difficulties that they feel that they may encounter in meeting their statutory obligations, and I shall bear the matter carefully in mind.
Let me tell the hon. Member for Don Valley (Mr. Redmond) that his authority, Doncaster, is being allowed a 9 per cent. increase before it comes within the range of capping. That strikes me as very reasonable.

Mr. Hind: My hon. Friend will be aware that councils such as Lancashire are avoiding making efficiency savings. A report that Lancashire commissioned from P and A recently showed that its social services and homes for the elderly were in a disastrous state. It has, however, shelved that report and done nothing about it. It is already £4 million overspent on its social services budget, and is now making cuts.
There is clearly a message here for councils: they should take the advice of those whom they hire to investigate their position. That is exactly the point that my hon. Friend was making a moment ago.

Mr. Portillo: I certainly agree that councils should be willing to take the best advice on how to run their affairs efficiently. My hon. Friend will probably be pleased to know that next year Lancashire will be restricted to a budget increase of 9 per cent., if my right hon. Friend the Secretary of State applies the criteria as he has said he will.
The purpose of this short Bill is to amend the existing law on the setting of substitute personal community charges to guarantee that the budget reductions that a council makes as a result of capping will feed through in full to chargepayers.
We decided to introduce the Bill following the judgments of the divisional court and the Court of Appeal in the Lambeth case in September. Lambeth chose, when setting its substitute charges, to deprive its charge payers of over half the cut in the charge implied by the reductions that it had been required to make in its excessive budget. That looked to me like a spiteful decision by the council. While there is an argument—not one that I accept, but one that I understand—that capping forces councils to make cuts that they think should not be made, I cannot see why, once they have been required to make those reductions, however reluctantly, they should still resist passing on to their charge payers the full reduction in their bill resulting from that cap.
What motive can there be for seeking to deny hard-pressed charge payers the full benefits of capping, especially for a political party that feigns concern for those who find it hard to afford the charge? Yet Lambeth was not alone in attempting to do its charge payers out of their dues. Haringey—and, to a lesser extent, a number of other authorities—tried it; indeed, Haringey went so far that we successfully challenged the legality of its decision in the courts—as I have already mentioned.
I believe that it would be wrong in principle for us to leave in place a loophole that enables an authority to deny its charge payers the full benefit of capping. This Bill puts matters beyond doubt for the future. By doing that, I hope that we can save a lot of court time and community charge payers' money which might otherwise be spent testing the law or contesting actions by Government or local councils. The reductions that an authority is obliged to make owing to capping will lead to commensurate cuts in charges, and we propose that that should be made entirely clear.
The Bill seeks to achieve its aim by means of a formula. It appears a complex formula, because it is algebraic. Let me briefly interpret it. The Bill provides that the new charge must be derived by our subtracting from the old charge the difference between the old budget and the new budget, divided by the area's adult population. If a budget is reduced through capping by, say, £50 per community charge payer, the community charge must be cut by £50.
Clauses 1 and 2 of the Bill must cater for that in the case of, first, precepting authorities and then, separately, charging authorities. It also prevents the use of a dodge to get around the formula by setting a further higher charge, after using the formula in clause 3. It must make provision for what authorities must do if, for example, both the district and the county are capped. Clause 4 ensures that there will be no wasteful multiple re-billing in such cases, and clause 5 deals with refunds that may be due to charge payers after capping.

Mr. Fraser: I understand the equation "A-(B-C) divided by the number in the adult population". How would the Minister determine "E", which is, I believe, between 0 and 1?

Mr. Portillo: "E" will apply to the City of London. It is intended to ensure that the reduction due to the community charge payer is passed on, because the finances of the City of London are very particular and specialised. The factor is 0·01. Although the Bill does not say that "E" refers to the City, I am able to reveal that it does.
The Bill is not as complicated as it looks. I admit that it is not proof against mockery from Mr. Matthew Parris, on the ground that its meaning does not at once leap from the page: that is the point that the Liberal Democrats have tried to make in their reasoned amendment, which has not been selected. I shall, however, endeavour to make all its provisions absolutely clear to the Standing Committee, and I shall supply every hon. Member who serves on it with all the helpful explanatory material that I can provide. Even so, I recognise that it is likely to give hon. Members some scope for amusement at my expense in Committee.
One thing that is truly in earnest is the Government's determination to keep council spending under control, and to offer charge payers a degree of protection against

profligate councils. The House will know that we found it necessary to make use of capping under the rating system: capping is not, therefore, a by-product of our moving to the community charge. For the reasons that I have explained, it might be necessary under any system of local government finance. Because of that, I see no merit in the other part of the Liberal Democrat amendment, which implies that we should hold fire until we have completed our review.
The Bill is needed in any event, and it is needed in time to protect community charge payers from April 1991. The loophole exists today—a loophole that threatens to cheat charge payers of the reductions in charge to which they should be entitled. The Bill closes it, and it is designed to guarantee that local people benefit from lower council spending.

Mr. Harry Barnes: Does that mean that, from April 1991, nothing will be done in the House to alter the current structure and system of the poll tax and its operation?

Mr. Portillo: I refer the hon. Gentleman to the second paragraph of my speech, in which I said that I had nothing to say about the community charge review further to what had been said by my right hon. Friend the Prime Minister. The hon. Gentleman and others will, however, have an opportunity to raise points in Wednesday's debate. We look forward to that.
If local councils will not act in the local interest, the Government will require them to do so. The Bill is part of that commitment, and I commend it to the House.

Mr. Bryan Gould: I am unlikely to be alone in detecting in the Minister's speech some embarrassment at the fact that he had to come to the Dispatch Box today to present this measure. That embarrassment arises, I think, from the existence of a puzzle at the heart of the Bill, which the Minister did not seek to resolve. That puzzle is not to do with the Bill's complexities—although, as the Minister has conceded, anyone who recalls the Government's promise that the poll tax Bill would be simple would be forgiven for seeing in the complicated provisions of this short Bill yet another poll tax promise that turned out to be false.
The real puzzle is why we should still be confronted with such a measure at all. Why do the Government, who have totally lost confidence in the poll tax, still insist on turning the poll tax screw even tighter? Why, after all the damage, failures, broken promises, insuperable difficulties, repudiations and resignations, do the Government still doggedly insist on digging themselves yet deeper into the hole that they have created? Why, after all the misery that the poll tax has meant for millions, the damage to local government services and the threats to the role of local government itself, do we still have to debate a measure that can only make matters worse?
Have the Government truly learnt nothing from the debacle of the last year or so, or is the truth, perhaps, that the lesson is clear enough but that they are paralysed by indecision about what to do about the poll tax? How can the Minister stand at the Dispatch Box and present a measure whose purpose—to nail down the discretion that


remains to local authorities as to how to set the poll tax—is flatly contradicted by statements made in recent weeks by virtually all his senior colleagues in Government?
Is the Minister unaware that the new Prime Minister has admitted that the problems of the poll tax are a technician's nightmare and that they have created an irresistible momentum for further change? The Prime Minister blames those changes on the fact that the Cabinet were "bounced"—his word—into decisions. Why, then, are we being bounced into taking this step, when surely the right course is to have a period of mature reflection so that the full implications of the Conservative party's disenchantment with—indeed, abandonment of—its flagship can be fully digested before it sails further on to the rocks?
Is the Minister aware that the former Chancellor of the Exchequer, the right hon. Member for Blaby (Mr. Lawson) has variously described the poll tax as "indefensible", " a grave error of judgment", "completely unworkable" and "politically catastrophic"?

Mr. Hind: The hon. Gentleman will be aware that, irrespective of what happens in the House today, it is impossible to introduce a new system of local government taxation by 1 April 1991 together with all the necessary back-up that would be required. Surely it is better to deal with the problems at this stage by means of an interim measure and then to have a full review of the community charge.

Mr. Gould: I am grateful to the hon. Gentlmart. He at least is a little clearer on that point—although I am not satisfied that he is right—than was his ministerial colleague. My purpose is to try to smoke out the senior Treasury Bench Ministers. We do not have the Secretary of State, a point to which I shall turn later.

Mr. Holt: He is sitting there.

Mr. Gould: Of course he is sitting there, but I want him to get up to answer the question. I want to know what the relevance of this measure is to the fundamental review to which the Secretary of State has committed himself. He will probably not intervene, because he is already on record about the principles embodied in the Bill.
Let me deal with other Cabinet members. A moment ago I dealt with an ex-Cabinet member, the former Chancellor of the Exchequer. The new Secretary of State for Education and Science—

Mr. Holt: On a point of order, Mr. Deputy Speaker. The Minister rightly drew attention to the narrowness of the Bill. The hon. Member for Dagenham (Mr. Gould) is making a wide-ranging speech, without intervention.

Mr. Deputy Speaker: The hon. Gentleman is following the pattern set by the Minister when he addressed the House.

Mr. Gould: As I am sure you will confirm, Mr. Deputy Speaker, when a Bill is given its Second Reading, it is perfectly legitimate for the Opposition to inquire why it has been introduced, given the political context from which it emerges. That is the point that I intend to pursue. From the line of argument that I am developing, we shall see that the point of the Bill emerges clearly and in an unfavourable light.
I was about to quote the new Secretary of State for Education and Science. He concedes that the poll tax is a

major problem. The Minister can hardly be unaware, either, that the Secretary of State for the Environment until just a week ago, the right hon. Member for Bath (Mr. Patten) who was in charge of the poll tax, is on record as saying that the poll tax is a bomb that has to be defused. If that is the case, why prime it further so that it makes an even bigger bang? Why should not the Minister adhere to the position, now revealed—admittedly, rather late in the day—by his former superior, that the poll tax cannot proceed in its present form? The Minister cannot be unaware, either, that the present Secretary of State for the Environment has repeatedly denounced the poll tax.
In deference to Mr. Speaker's ruling, I shall not go into the details of the myriad complaints and denunciations that the right hon. Member for Henley (Mr. Heseltine) has levelled against the poll tax. They can await our debate on Wednesday. However, we ought to recall that the right hon. Member for Henley made his critique of the poll tax and his determination to replace it in some form or another the centrepiece of his election strategy for the Tory leadership. He was joined by every other candidate for the Tory leadership. All agreed, at least implicitly, that the poll tax had been a disaster. Why, then, does the Minister come to the House with this measure, which has been disowned, at least by implication, by the Government as a whole and by his own Secretary of State?

Mr. Andrew Mitchell: The hon. Gentleman is setting up a bogey man that he intends to shoot down. My hon. Friend the Minister stated clearly that the point that the hon. Gentleman addresses is not relevant to the Bill. The Bill had to be introduced in order to enable the Government effectively to cap councils that overspend. That was true under the rates. It is now true under the community charge. Why does the hon. Gentleman persist in pursuing a point that is not at issue today?

Mr. Gould: The hon. Gentleman seems, surprisingly, not to have heard the made repeatedly point by the Minister in the second paragraph of his speech. In it he explicitly refrained from making the point that the hon. Gentleman has just made. The reason is that the Minister will not say what relationship the Bill will bear to whatever emerges from the fundamental review. He does not intend to tell us anything about that. Therefore, we are entitled to ask the question; we have not yet had an authoritative answer.
It is not surprising, and it is perhaps significant, that the new Secretary of State for the Environment on this occasion—the first occasion he has had on which to address this major preoccupation, this virtual obsession—remains silent and simply a bystander. I suspect that the Secretary of State just sits there because he is happy to allow the Minister to be the fall guy.
Why is that happening? There is one explanation: that, on this occasion, the Minister is a volunteer, not just a pressed man. He alone in the whole of the Government still believes in the poll tax. He still believes that its dread disciplines must be imposed, irrespective of the damage they cause. That was his message to the Tory conference just a few weeks ago. He told the Tory party then:
far from being a vote loser, with your help, it"—
the poll tax—
will be a vote winner and launch us on our fourth term.


If I recall correctly, that stirring statement earned only the most lukewarm of applause. I suspect that the hon. Gentleman would be hard put to it to find anyone who now subscribes to those sentiments.
The Minister was soon at it again. On 14 November, he told us that the poll tax review was now complete—that no further changes were needed and that all the problems had been ironed out. Thus spake the last true believer in the poll tax, before he was overwhelmed by the headlong rush of all his senior colleagues, including the right hon. Member for Henley, to bale out from a disaster area.
On that interpretation, the Minister deserves at least some recognition of the fact that he alone still has the courage of his colleagues' former convictions.

Mr. Deputy Speaker: Order. I think that the hon. Gentleman ought to return to the terms of the Bill.

Mr. Gould: That is exactly what I intend to do.
There is, however, one further possible interpretation of the Minister's position on the Bill. It begins with our recollection that he was originally appointed as the then Secretary of State's minder—a member of the Stasi, one might say—to ensure that there was no backsliding and that the sacred principles would be intact after the last review had taken place. Is that, perhaps, still his role? Is his continuation as Minister for Local Government and Inner Cities a sign that he is required by the Prime Minister to ensure that the fundamental review becomes just a matter of further refinements? Is that why he is still with us, doggedly chanting the same old incantations, pursuing the same old rituals and demanding the same old sacrifices?
The Minister is out of line with the Secretary of State not only on the principle of the poll tax but on the point advanced by the Bill—capping and the apparent closing of the Lambeth loophole. On that point perhaps above all others, the Secretary of State was most clear and specific in his critique of the poll tax. He aimed a scatter-gun at virtually everything about the poll tax, but the one thing on which he was very clear was the point about capping.
The Bill, after all, is the measure of a Government who are not content with their power to fix budgets for local authorities. The purpose of the Bill is to make the poll tax cap fit even tighter, to override the judgments, as the Minister pointed out, of the High Court and Court of Appeal by permitting the Secretary of State to fix the poll tax bill—at least by necessary implication—without reference to factors such as the collection level in a locality or its effect on services and on the ridiculous assumption, which was confirmed by the Minister, that the collection level will be 100 per cent.
It is the most extreme form of central Government diktat over local government that we have yet seen, and all in the name of a poll tax which is now completely discredited. How can the Minister argue for a measure that empowers the Secretary of State to substitute for the judgment of the local authority on the size of the poll tax bill, when the judgment of the Government on the principle of the tax has been repudiated by their own supporters?

Mr. Holt: Would an incoming Labour Government place any controls on local government, or would it be allowed to set whatever level of charges it wished on the local inhabitants of its area?

Mr. Gould: We have repeatedly made it clear that we do not think that capping is the right answer to the problem. As I shall show, the Secretary of State agrees with us.
In his celebrated article in The Times on 10 May, the Secretary of State said that they had "crawled over" the capping option but finally rejected it. Why had they crawled over it but rejected it? He pointed out the practical difficulties of setting a limit that is neither too high nor too low, and he concluded that such a system would
negate accountability and be an act of centralised political power outside our experience. On these grounds alone, it should be resisted.
The hon. Gentleman made those points with all the more force because he knows, as we know and as everybody knows, that the only case made for the poll tax was that it would improve accountability. With that same perverse destructive logic that has destroyed everything it touches, the poll tax has now attacked the principle that gave it birth. The Bill is the death knell of accountability. It means that every aspect of local government finance is under central Government control.

Mr. Sydney Bidwell: Does not the nation understand that that is the prime reason why the right hon. Member for Finchley (Mrs. Thatcher) is not still our Prime Minister?

Mr. Gould: I am sure that is right, and I am sure that it is very much the view of the Secretary of State.
As a consequence of this measure, every poll tax bill will, either directly or by necessary implication, be sent out with the sanction of the Government. The bills that arrive next spring will be the Government's bills.
The right hon. Member for Henley (Mr. Heseltine) has scored not the full success that he clearly hoped for but at least a change in the leadership of the Tory party and recognition that the poll tax has to change. But at the very time when he secured that change and put the party in a position where it is doing all it can to distance itself from the measure that it created, the Bill locks the Government in even more tightly to every poll tax bill. That is a negation of accountability carried to an extreme which even the Secretary of State could not have foreseen.
The Secretary of State presumably agrees with us. He advised us in his article in May to resist. "Resist"? Introducing a Bill in his name that will put the Government in charge of the poll tax not only does not resist the measure but nails down the coffin lid even more firmly. "Resist"? We should not have to resist. In the political situation that now obtains, the Bill should be withdrawn. The idea, the policy and the poll tax that the Bill defends is bankrupt and defunct. If resist we must, resist we shall. We shall resist with our votes against the Bill. We challenge the Secretary of State to join us in that resistance in the Lobby this evening.

Mr. Kenneth Hind: I welcome my right hon. Friend the Member for Henley (Mr. Heseltine), who is now leaving, to the Front Bench. I never realised that I had quite such an effect on Ministers, but one learns something every day.
Perhaps the fact that my right hon. Friend was on the Front Bench shows that a rethink on the community charge is needed. Many of us welcome that rethink and look forward to his deliberations. In the meantime, it would be impossible to introduce, for the next financial


year, a fundamental change in the system of local government finance. The Bill amends the current system and enables some sensible financing under the present legislation.
The hon. Member for Dagenham (Mr. Gould) referred to damage to local government. The Bill does no damage to local government. It represents a need for prudent financing, cost savings and provision of good value for money for the payers of local government tax, whether it be rates, the community charge or, as the Liberal Democrats would advocate, a local income tax. It does not matter what the system is, because what is needed is a prudently financed system that serves the community and provides good services. The purpose behind the Bill is to protect local government taxpayers from profligate financing by local government and to prevent it from taking from community charge payers far more money than they can afford, which reduces their standard of living.

Mr. Allen McKay: The hon. Gentleman is talking about prudent financing. Why does he support a system that costs my authority £3·5 million more than collecting rates? He is supporting a Bill that will increase that expenditure.

Mr. Hind: I cannot speak for the hon. Gentleman's authority, but some authorities in Lancashire—mine in particular—have had no trouble in collecting the community charge. A large number of people registered and the cost has not been excessive. The cost of collection probably comes down to prudent financial management. I do not know whether the hon. Gentleman's local authority is prudent. I assume that it is Wakefield—

Mr. McKay: indicated dissent.

Mr. Hind: It is Barnsley, then. A number of authorities in Yorkshire missed being capped by a whisker as a result of the £26 rule. That suggests to me that their spending was high and that their community charge was high, which in turn suggests a sad lack of prudent financial management.

Mr. Martin M. Brandon-Bravo: My hon. Friend has argued that the Bill seeks to limit councils' spending, and hon. Members and people outside the House are presuming that the Bill will automatically produce a proportionate reduction in the community charge. Will my hon. Friend bear in mind the fact that, although it limits council spending, the Bill will not specifically prevent a council from imposing a penalty on charge payers in respect of those who will not—I stress "will not"—pay their community charge? There will be a levy on the innocent to make up for the crimes of the guilty. Does my hon. Friend agree, therefore, that the Bill needs to be strengthened—quite the opposite of what the Labour party has argued?

Mr. Hind: My hon. Friend makes a good point. There can be no excuse for disobeying the law by not paying the community charge, especially as failure to pay by some people may result in a burden being placed on those who do pay. That is grossly unjust. Do those who refuse to pay—unfortunately, there are some hon. Members among them—consider paying what they would have paid under the rating system? Do they not realise that, by their refusal to pay, they are depriving children in schools and elderly

people in homes, and taking money from the meals-onwheels and home help services? They are hitting the most vulnerable people in society who cannot afford to hit back.
Suppose that a Labour Government—I doubt whether we shall see one in my lifetime—introduced a tax with which we disagreed. They would not smile if we said that we would not pay it. Refusal to pay is a recipe for anarchy—

Mr. Harry Barnes: Will the hon. Gentleman give way?

Mr. Hind: The hon. Gentleman is a classic example. He has refused to pay, and I shall certainly not give way to him.
Rate capping was used to control local government spending and so protect the ratepayer, and community charge capping has been similarly successful in protecting the charge payer. A Gallup poll conducted in April 1990 showed that 53 per cent. of voters recognised the need for the Government to protect the community charge payer in certain circumstances from excessive spending by local authorities. I would point out that 43 per cent. of Labour voters think that, too. Presumably many of them live in areas with Labour-controlled local authorities and bear the burden of those councils' profligacy.
The hon. Member for Dagenham argued that there was no excuse for capping, and that we should abandon it now. I maintain that there are plenty of reasons for capping. In my own county of Lancashire, for example, we must encourage councillors and local government managers to focus their attention on the need for proper prudent financial management.
Lancashire spent a vast amount on a P and A report, in which the social services provided by the council were examined. That report has been shelved. It said that the meals-on-wheels and home help services, as well as some of the criteria used in the running of old people's homes, were a disaster, and suggested ways in which the system could be improved and in which money could be saved for the benefit of community charge payers.

Mr. Deputy Speaker: Order. The Bill deals with particular aspects of community charge capping. So far, I have allowed the debate to range over the general principle of charge capping. The hon. Gentleman is taking the matter a stage further and referring generally to the relative wisdom of the community charge and other systems of local government finance. He is going very wide of the subject before us.

Mr. Hind: I shall bring my remarks back into order, Mr. Deputy Speaker.
The hon. Member for Dagenham described the Bill as the death knell of accountability. My point is that, far from being the death knell of accountability, it will focus the attention of local councillors and local government officials on the need to give good value for money in the provision of services to the public and on the cost of those services. That is what the Bill is all about. Lancashire increased its expenditure by 15 per cent. last year when inflation was only 7·8 per cent. Can an increase of twice the rate of inflation reflect prudent financial management?
Many hon. Members, myself included, originally failed to identify a further reason why capping will be important. In local government, we have a four-year cycle. In the first year following its election, a council may increase the charge that it levies by a huge amount. For the first three


years, the extra money will be stored away in the bank reserves. In the year of an election, all the reserves that have been accumulated can be used to reduce the charge to ensure that the council is re-elected. We can surely expect prudent financial management every year, and capping will focus the attention of local government officials and councillors on the need to avoid that cycle of events which is to the detriment of local charge payers—although, to be fair, I ought to say that all councils of all political complexions are guilty of the practice.

Mr. Allen McKay: I must challenge the hon. Gentleman's statement. He said that all councils were guilty of the practice. My council has always gone to the electors after three years. It is evident that the hon. Gentleman does not know much about local government. Authorities cannot create reserves to spend in later years, because the books are audited and the auditors would pick the sums up. Authorities can only accumulate reserves for a rainy day. The Government's policies have made them spend that money, so that now nothing is left for a rainy day.

Mr. Hind: The hon. Gentleman has picked me up on my general point. Let me be more specific. The hon. Gentleman was talking about district councils, and I agree that they are elected on a three-year cycle. I was talking about county councils, which are elected every four years.
In my district of west Lancashire, £32 of the community charge is payable to the district council and the remainder—£344—is payable to the county council. That is why capping is important. A survey was carried out in west Lancashire of 500 voters, who were asked what the district council and the county council do. The majority of the voters did not know, and they did not know where the money went.
Under the two-tier system, the district and the county councils should send out separate bills to the charge payers. They should be able to justify that expenditure, so that the odium does not fall on district councillors who, particularly in west Lancashire, run a good council prudently and who budget sensibly.
We are debating the Bill against the backdrop of a review. However, whatever comes out of the review, we must ask for good prudent management of local government resources from our local representatives and officials. It is essential that we introduce this proposal next year to protect community charge payers, because there is a danger, particularly in Lancashire, that the community charge will be whacked up as high as possible to embarrass Conservative Members who represent Lancashire.
That would be an attempt to turn the voters against those Conservative Members. The rise would have nothing to do with prudent financing, but a lot to do with the exploitation of a political advantage. That rise should not be allowed to happen at the expense of the voters and those who genuinely cannot afford the rise. Against the backdrop of the review, which I greatly welcome, I do not hesitate to support the Bill.

Mr. A. J. N. Beith: I cannot imagine that there is another legislature in any democracy in the western world that is currently attempting to digest

a piece of legislation remotely comparable to the Bill. Can anyone imagine that Chancellor Kohl, fresh from his election victory, and his Free Democrat allies are rushing down to the Bundestag to legislate that
A -((B-C) x E)/D
should be the formula for the local citizens of Bonn to contribute to their local affairs? That is utterly inconceivable. No sensible legislature at national level would attempt to legislate in such absurd and complex detail for the affairs of local government, which most other countries believe can be better settled and resolved at local government level.
If the events of the past two weeks had not taken their rather dramatic turn, the Bill would have been introduced on the basis that it was a small technical refinement to an otherwise excellent piece of legislation on the community charge, which was described by the outgoing Prime Minister as the best local tax that has yet been invented. It remains to be seen whether that was intended as a challenge to the inventive powers of her then opponent, the right hon. Member for Henley (Mr. Heseltine), who is now the Secretary of State for the Environment. Obviously the Secretary of State for the Environment has left the Chamber and gone away to invent something as rapidly as he can.
The Minister introduced the Bill with a slight air of apology, and said that the review must go ahead. He said that the Bill should be on the statute book notwithstanding that review. Why must we have the Bill at all? Why must we have substitute setting with or without the formula of A plus B times C and all the rest of it? Surely the poll tax was intended above all to produce such high accountability for local spending that no one would elect an authority that would land him with an unreasonable charge.
Many people now have to pay unreasonable levels of poll tax. However, the outcome of legislation so far, which will not be solved by the Bill, is that no one can agree who is to blame for the unreasonable levels of poll tax. The Government claim that it is all the fault of the wicked socialists and sometimes they are right. However, that does not entirely explain the situation in many Conservative-controlled areas. It does not even explain the situation in local authorities where Conservative oppositions have argued that the spending assessments are inadequate and that something near the authorities' proposals should be spent.

Mr. Corbyn: Does the hon. Gentleman believe that local authorities should have an unfettered ability to spend their own money without control from central Government? That is the heart of this legislation.

Mr. Beith: I shall come to that later and consider what we should put in place to prevent all this nonsense. The principle by which local government should operate, and does operate in many countries, is that local authorities are accountable to the local electorate for what they spend. Central Governments do not need to interfere. Certain conditions must be met for that, and I shall consider those in a moment.
Even before the Bill—and probably more so after it is enacted—people were completely confused as to who is to blame for high poll tax charges. Much of the blame is laid at the door of the Government's standard spending assessments, not least by some of the Government's


supporters who, in Northumberland, argue that Northumberland's standard spending assessment is not satisfactory.
When the poll tax was introduced, it was said that it would he an easier tax to collect than the rates. No one involved in the rating system believed that for a moment. It was clear that the poll tax would be more difficult to collect. The central issue in the Bill is whether a local authority will be allowed during the year to revise upwards its estimate of the cost to it of non-payment.
In my part of the world, there is quite a lot of non-payment, which is not based on political campaigns. Some people campaign for non-payment, but many are struggling desperately to keep up their payments from an income that does not meet their costs. They do not want to take part in a campaign or to be in the firing line. They just wonder where they will find the next payment. As a result, local authorities find it difficult to meet their bills and in particular to come to terms with the levels of revenue that the Government said that it was reasonable for them to expect.
The anomalies produced by the poll tax could not have been dealt with in a Bill as small as this. Even if we consider the anomaly on which the Bill is based, why did the Government start by capping expenditure if they are now dissatisfied with that arrangement? The Government introduced the Bill because they now believe that they should have capped the poll tax levels in the first place and not the levels of expenditure. If the Government could not get that right, it is not surprising that they got so much else wrong in the poll tax.
However, no one has explained why they did it that way in the first place. Was it an extraordinary discovery that at the end of the day there might be a difference between the effects of capping expenditure and the effects of capping the tax level? The Government did not seem to realise that such a difference might arise. We should not have needed this Bill if the Government had got that right in the first place.
If we enact this change in the poll tax, it will not deal with the grinding unfairness of the poll tax or with the crude inequity of the system, in which some areas cannot fix reasonable levels of poll tax because of the way in which the grant system works. For example, in my constituency, the poll tax is more than £435 in Castle Morpeth. That is £100 a head higher than in the neighbouring areas of the same county. That difference is not related to the level of expenditure in Castle Morpeth; it stems from the system of reliefs and transitional provisions in which the council finds itself enmeshed and the crude way in which the Government have lumped together areas of high and low rateable values and treated them as if they were the same.
The same lack of attention to detail gives rise to the Bill. The Government have failed to consider the precise consequences of legislating in a particular way. The Bill will not help those in sheltered housing schemes who do not qualify for transitional relief. It will not help people who are struggling to pay their own way, who do not receive benefits and are not dependent on housing benefits or community charge benefits, because they have just enough capital to exclude them from such benefits. They do not receive any benefit from transitional relief.
A little later this evening, hon. Members will discuss another Bill that deals with another anomaly that is illustrative of the Government's failure to get it right. I refer to the Bill dealing with caravans and caravan sites. As

the Government have got so many things wrong, including the central issues of this Bill, that it is difficult to give them the benefit of the doubt and assume that the current review will bring an end to all the problems.
We do not know how the Bill will fit in with the results of the review that the Secretary of State has rushed away to work on. We do not know whether we shall get banding or, a scrapping of the tax, or how far the Secretary of State is prepared to go towards local income tax. During his election campaign he was asked why he was not prepared to support the Liberal Democrat proposal of a local income tax. His reply was—

Mr. Deputy Speaker: Order. I do not think that it is in order for the hon. Gentleman to try to identify all the various aspects of the community charge that are not included in the Bill and then seek to debate them. I very much hope that the hon. Gentleman will confine his remarks to what is contained in the Bill.

Mr. Beith: I am seeking to establish how, according to the formula in the Bill, substitute setting would work, if, as appears to be the Minister's intention, the Bill remained on the statute book, but fundamental changes were nevertheless made in the tax to which it applies. For example, local income tax, which would clearly be one of the directions in which we could go—

Mr. Deputy Speaker: Order. That matter is not relevant to the Bill. I hope that the hon. Gentleman will confine his remarks to the Bill.

Mr. Andrew F. Bennett: On a point of order, Mr. Deputy Speaker. I thought that it was a long-standing tradition of the House that it was always reasonable on Second Reading for the debate to be fairly wide and for hon. Members to speculate about the implications of a certain measure on other measures. I thought that it was only on Third Reading that we must refer narrowly to the Bill. It seems that the hon. Member for Berwick-upon-Tweed (Mr. Beith) is legitimately raising issues that many hon. Members have already raised and that many others would wish to raise.

Mr. Deputy Speaker: I have allowed a wide debate. I thought that I had been the object of some reproach for allowing too wide a debate. [Interruption.] It must be for the Chair to judge how widely a debate can range. I do not see anything in the Bill that gives rise to a debate about alternative methods of raising local government finance, such as local income tax. Perhaps we may proceed.

Mr. Corbyn: Further to that point of order, Mr. Deputy Speaker. I do not wish in any way to challenge your ruling, but it occurred to me that it is impossible to oppose the Bill or, indeed, to speak in favour of it without speaking within the circumstances of it. There are apparently now no Tory Members, or perhaps there is one, who have supported the poll tax anyway. They are about to bring forward legislation to remove the basis of the Bill, which is the 1988 legislation. Perhaps you could enable the hon. Member for Berwick-upon-Tweed (Mr. Beith) to explain what the alternative would be for controlling expenditure in the Lambeth case in the event that the 1988 Act were repealed.

Mr. Deputy Speaker: I call Mr. Beith.

Mr. Beith: I hope that you will understand my difficulty, Mr. Deputy Speaker. I accept—it was in the


process of accepting it that I was making my point about what the Secretary of State had said—that the Secretary of State will not introduce a local income tax. He gave a reason for that, and it is relevant to the background—that he was not a Liberal Democrat. I do not think that that is a sufficient reason.
However, let us take it for granted that, on that narrow doctrinaire ground, he has decided not to introduce a local income tax. What I think he may do and what will enable him to keep the Bill on the statute book while he does so is to get as near as he can to a local income tax within the framework of the community charge and preserve the poll tax-capping powers that are in the legislation, refined as they would be by the Community Charges (Substitute Setting) Bill.
The Secretary of State wants to get as near as he can to a local income tax without having to admit that we were right and so many of his colleagues are wrong. If he proceeds along that road, unless he is prepared to go virtually the whole way, he will end up with even more anomalies than the Bill addresses. Any attempt to use banding is likely to cause extremely complicated arrangements and substantial poverty traps. Instead of having the substitute setting Bill, we shall have a series of fresh Bills to deal with all those matters, and the Secretary of State will be in a similar difficulty. Night after night, hon. Members will be faced with another Bill to modify yet another aspect of this ludicrous tax—it is so ludicrous as to be virtually unreformable without total abolition and replacement.
An important core principle has been raised by Ministers and by Opposition Members. Is it possible to have a system of local taxation, even one based on the community charge, in which we do not have the capping mechanism and we do not need legislation to set out in detail what authorities individually are allowed to charge? I maintain that it is, but we must get the conditions right. The Secretary of State has shown some awareness that there are such conditions in the wide-ranging ideas which he has put forward and which certainly go far wider than he is proposing tonight. He obviously recognises that accountability must be genuine and that people must see what they will be charged and who is responsible for the level of charge.
It is possible to leave freedom to local authorities if we have a fair tax—I propose a local income tax—and a fair voting system, so that the outcome of the votes that are cast is representational of the council chamber, and if we recognise that, in that context, we can have some reasonable diversity around the country about the choices that people make.
At the heart of the Bill is a belief on the part of the Government that diversity is not allowed and that it is not reasonable for one part of the country to choose a higher level of expenditure than people in another part. If that is their belief, they are flying in the face of centuries of tradition of local diversity—centuries of tradition to which Bills such as this are completely foreign. If one were to show such legislation to many past prominent local government leaders, even people who have been Conservatives, they would find it extraordinary that any Government of any party, least of all their own, should want to propose such legislation.

Mr. Hind: The hon. Gentleman makes the point that past local government Conservative leaders would be astonished by the legislation. Those people recognised the need for prudent financing. They did not collect high rates. They did not need this sort of legislation. This matter is one of the problems that has come out of the 1970s and 1980s. Surely the hon. Gentleman must agree that, if there are high levels of local income tax, if he were in power he would want to protect payers on a local basis and would need such legislation.

Mr. Beith: I believe in democracy. If the system is right and it is clear who is responsible, which it certainly is not at the moment and will not be under the Bill, I do not see why a case as strong as that should not be put by those very Conservatives to their own local electorates so that they win elections for those councils if the public support their case. That is the principle for which I am arguing.
I hope that, in all his considerations, the Secretary of State will get a little nearer to that principle, but it is far from clear what will happen. There has been a major change of heart in the Government in respect of the poll tax. The tradition is that if one is greeted by a blinding light on the road to Damascus, one of one's first actions is to cease to make further arrangements for the persecution of Christians. The essential steps following conversion do not seem to have been taken by the Government, and there is no better illustration than this ridiculous Bill.

Mr. Andrew Mitchell: I am grateful for the opportunity to make a few comments.
The hon. Member for Dagenham (Mr. Gould) asked why it was necessary to debate the measure in the light of the events of recent days and the announcements by the Prime Minister and the Secretary of State for the Environment. He missed the point, which was well made by my hon. Friend the Minister for Local Government and Inner Cities, that capping is not simply germane to the community charge but that it was also necessary and used under the iniquitous rating system that the Opposition seem so enthusiastic about reintroducing in a slightly modified way. It needs to be used now, and it may need to be used in future. The hon. Member for Dagenham was being uncharacteristically obtuse in not realising that the measure is extremely important as an effective mechanism for controlling high local government expenditure.

Mr. Corbyn: Could the hon. Gentleman explain to the House how, if 373 Conservative Members no longer believe in the poll tax, it ever got through the House? Was it just a trick of the light?

Mr. Mitchell: First, the hon. Gentleman knows perfectly well that if I were to stray too far down that path you, Mr. Deputy Speaker, would not permit me to proceed, and I should not dream of trying your patience in that way. Secondly, the Government have always made it absolutely clear that they have every intention of keeping the community charge under continual review until it has settled down. Therefore, it is not surprising that there have been three, possibly four, reviews since its introduction.

Mr. Brandon-Bravo: Does my hon. Friend agree that, when our colleagues voted for the principle of the poll tax it never occurred to them that local authorities such as our own in Nottinghamshire would have the nerve or the gall


to impose on the citizens of Nottinghamshire what has been described as £104 million-worth of improved services, which amounts to £100 extra from every adult in our county?

Mr. Mitchell: My hon. Friend is absolutely right to make that point. I have no doubt that, if he catches your eye, Mr. Deputy Speaker, he will draw to the attention of the House the effect that the capping legislation might have on Nottinghamshire next year at a time of such heavy increases in expenditure and when everyone in my hon. Friend's constituency and in mine has recognised the almost undisguised glee with which Nottinghamshire's Labour-controlled county council has bumped up its expenditure under the disguise of implementing the community charge.

Mr. John Battle: The hon. Gentleman said that he could not see what connection the Bill had with the poll tax. Perhaps he could explain why the Bill simply changes sections 35 and 107 of the Local Government Finance Act 1988, which deals only with the poll tax. If the Minister was concerned about capping in general, why has he not changed some other pieces of local government legislation, of which there are many? How on earth can the hon. Gentleman defend changing that legislation which I hope that he would vote to repeal? We certainly intend to vote for the repeal of that Act as soon as the Secretary of State has the nerve to put such a motion before the House.

Mr. Mitchell: The answer to the hon. Gentleman's intervention need not come from me. My right hon. Friend the Minister for Local Government and Inner Cities spelled it out clearly when he dealt with the need for this Bill at this time. As he made clear—perhaps it bears repeating one more time—the Government attach considerable importance to effective capping, which was necessary under the rating system and which is even more necessary under the present system.
I should like to put on the record my intense gratitude to my hon. Friend the Minister for Local Government and Inner Cities who, during the last review, took many soundings from Conservative Back Benchers. I am grateful for the time that he afforded to me, and I am delighted to hear that there is to be another review. I very much hope that many of the points that were made during the last review will now, in view of subsequent events, be worthy of greater consideration than they were given at that time. I am sure that there is now determination and great scope for changing the community charge in a helpful manner.

Mr. Hind: Does my hon. Friend agree that there is now no excuse for any authority to be capped because my right hon. Friend the Member for Bath (Mr. Patten), the former Secretary of State for the Environment, set out the criteria for capping some weeks ago? When preparing its budget for the start of the next financial year, every local authority knows exactly what its limits are. Therefore, any authority that is capped has volunteered for it and is deliberately taking on the Government head on.

Mr. Mitchell: My hon. Friend is absolutely right, and that point bears underlining. Many local government bodies and amalgamations of them made it clear that, if there was to be any capping criteria for next year, they wanted it spelled out clearly by the Secretary of State for

the Environment well in advance of determining their budgets. As my hon. Friend has said so clearly, those criteria have been spelt out in the House and to all local authorities. So any local authority that decides to breach those guidelines will be volunteering itself to be capped. I believe that that extremely important message has now gone out.
In his speech my hon. Friend the Member for Lancashire, West (Mr. Hind) referred to the critical importance of paying the community charge and of ensuring that authorities are not capped. He spoke about the effect that non-payment can have on meals-on-wheels and other critical services. It is extremely important that anyone who decides not to pay the community charge—we heard something about this from the hon. Member for Dagenham—should realise the effect that that can have on the services which, no doubt, that person seeks to defend.
One would have preferred to hear the hon. Gentleman make a clear statement calling on everyone to pay his or her community charge. Perhaps he should have made a few comments about the 28 Opposition Members who have declined to pay their community charge. It would have been more helpful to the House and to the local authorities that are struggling to collect the community charge if the hon. Gentleman had done so.
When considering capping, one should not neglect the fact that it is extremely popular in the country. A recent survey showed that only 36 per cent. of those who were asked were not in favour of the capping procedure and would not wish the Government to use it where necessary. That is a powerful boost from public opinion in support of capping.
One should also bear in mind the effect of capping on services. My hon. Friend the Minister said that, whenever capping is raised as a proposition, the local government units affected immediately shout and scream about the dire effects that the capping will have on the services that they seek to provide for the needy in the areas that they look after. Is it not the case, however, that even organisations such as the National and Local Government Officers Association now acknowledge that there is clear evidence that capping is not having anything like the effect that was threatened when the Government set out their capping proposals?

Mr. John Butcher: On his point about the popularity or otherwise of capping, is my hon. Friend aware that the Labour-controlled Coventry city council introduced an innovatory technique in the early 1980s when it decided to hold a local referendum in all the Coventry constituencies, asking, "Would you like to see a supplementary rate? Are you aware that we can only improve services by a supplementary rate?" None of the four Coventry constituencies voted less than 80 per cent. against any increase in expenditure. Does my hon. Friend agree that that is yet another verification of the fact that when people are asked whether they want unnecessary increases in expenditure for increases in services—when given a chance to express themselves—they invariably vote against such a proposition?

Mr. Mitchell: I am extremely grateful to my hon. Friend for his sensible and constructive intervention, demonstrating the critical point about accountability, which is at the heart of what so many of my hon. Friends


have said. My hon.Friend has also demonstrated that, when accountability is put to the test of public support, it receives that support every time.
Not only is capping popular, but it has been demonstrated that it does not have the dire effects that we were promised would be visited on authorities where it was used. I can do no better than quote from a survey on the likely effects of charge capping published by the newspaper of the National Association of Local Government Officers, Public Service, with which all of us are familiar. My hon. Friend the Member for Basildon (Mr. Amess) has had to depart for a meeting with his constituents, but, according to the newspaper, in his constituency,
No redundancies were anticipated.
The newspaper continued that, in Brent, there were
No cuts required as a result of capping.
In Bristol, there were
No redundancies, no cuts in services, no charge increases.
Calderdale was
Holding growth, increasing some charges and cutting some non-essential services.
In Camden there were
No cuts necessary. Cap was £4·4 million. Council said, 'Our income was sufficient for us not to need to make cuts.'
In Greenwich there were
Some redundancies expected, but no large-scale job cuts.
Lambeth
Managed to avoid closure of front line services and no redundancies.
In Rochdale there were
No compulsory redundancies.
Those are not the quotes of a Government Back Bencher, from the Department of the Environment or from one of its Ministers, but come from NALGO's own newspaper, and I have given them to the House as they appeared in it.

Mrs. Mahon: I thank the hon. Gentleman for giving way and acknowledging that Calderdale, my local authority, tried its best to minimise the effects of capping and, by and large, avoided compulsory redundancies. However, is he aware that, night after night in the local press, Tory councillors complain bitterly about swimming baths being closed, repairs not being done in schools and the many losses of services? Matters could have been worse had Calderdale not used balances and been careful about how it made the cuts. It cannot do that year after year.

Mr. Mitchell: It would not be appropriate for me to comment on the effectiveness or otherwise of the way in which Calderdale runs those services—

Mr. Robert N. Wareing: The hon. Gentleman was doing just that.

Mr. Mitchell: As the hon. Gentleman will have heard, I was quoting from the NALGO newspaper. Any authority must seek to provide services for which the people they represent can afford to pay.
It has been widely argued that the Bill is an attempt to deal with the Lambeth loophole. Although I do not represent a London constituency, I am sure that all my hon. Friends were appalled when, after the court case, Lambeth councillors and the leader of Lambeth council literally danced on the steps of the town hall because of their delight at being able to send out to the people they

purport to represent a larger bill than the Secretary of State wished them to do. That is one reason why, as the survey also clearly demonstrates, capping is popular in the country. Many of my constituents wished that Nottingham county council would be capped and could not understand why the Government did not do so.
That is why we must salute the outgoing Secretary of State for the Environment for the way in which he has made so clear the criteria that will apply this year and acknowledge that there are many people up and down the country who will be pleased that he is determined—and his successor is equally determined—that the effectiveness of proper capping should be seen to be clearly maintained and enhanced. It would not be right for the Secretary of State to go in and out of the courts over narrow points of law. The ground rules of this important system need to be set out well in advance.
In his opening speech, the Minister rightly made much play of accountability and the important fact that elections, the benchmark of accountability, are out of sync with the introduction of the community charge. My hon. Friend said that county councils will not have to stand for re-election until 1993, so that there is a long period before many of them will be brought to book for their high spending.
When looking at the exact terms and measures enshrined in the Bill, it is important to recognise that accountability is made much more difficult when two tiers of authority cost the bill every year. In my district we have a prudent, low-spending, effective, Conservative-controlled borough council which is responsible for only 10 per cent. of the community charge bill, and a high-spending Labour county council which is responsible for 90 per cent. of the cost.
My hon. Friend the Minister rightly described accountability as the benchmark of the Bill. It is also right to make it clear that, in a district such as that which I represent—Gedling—two tiers of authority make accountability much more difficult and blur the issue. The capping measure, which is tightened in the Bill, is essential to save charge payers from the high charges that can be imposed on them, particularly in districts such as Nottinghamshire, where it will be another three years before we can bring the high-spending county council to book.
When the review—the subject of Wednesday's debate in the House—takes place, I hope that Conservative Members will accept that the basic principle of the community charge is not at fault, but the heavy amount which people such as my constituents will have to pay. Almost no one in my constituency disputes the principle of the community charge, but many people do not believe that the amount charged can be, or should be, supported.
It is impossible to view the Bill in isolation and separate from the new review of the community charge now being undertaken. It is essential that, as part of that review, we consider local government structure and ensure that fundamental to any review is the notion of bringing local government as near as possible to those it seeks to serve. That should not be forgotten when we consider the review.
This short and technical Bill makes it absolutely clear that the local authority must pass on to its charge payers the reductions sought and granted under capping legislation. It is astonishing that any authority should not seek to do that. I am delighted that the Bill, which will, I hope, receive a Second Reading tonight, will ensure that there is no way that that cannot happen.
I am also delighted that my hon. Friend the Minister made it absolutely clear that he finds it appalling that some hon. Members are still not paying their community charge, thus entailing a loss of revenue to local services. It means that all too often people sponge off their less-well-off neighbours. As my hon. Friend the Minister said, it is astonishing that the Labour party, which claims to want to see bills reduced, is to oppose the Bill.
My hon. Friend the Minister talked about the control of public expenditure—and as though on cue he walks back into the Chamber. He made it absolutely clear that, while the Government have done a great deal to control their expenditure, local authorities have consistently failed to bring their high expenditure under control. He mentioned that in the past two years alone local government has increased its expenditure by 25 per cent. That is a formidable statistic which underlines the point that neither Conservative nor Labour Members have been able to grasp in recent years: local government expenditure remains uncontrolled and out of control. I believe that I was a former Member of this House, Dick Crossman, who said on the steps of one of our great town halls that the party was over in local government spending—[Interruption.] I may be wrong about that; if so, I am sure that it will be corrected by one of my hon. Friends. But, whether he said it or not, the party is not over. We have never been able to control local government expenditure effectively. My constituents have reached the point of demanding that it should be effectively controlled, and I very much hope that that fundamental point will be dealt with in the review.
The community charge and its introduction have been used as a scapegoat for higher expenditure by local authorities. The criteria for capping this year make it plain that local authorities will not be able to get away with that. I welcome that, just as I welcome the Bill. I wish it a speedy transition into law. It deals with only a small part of the major difficulty with the community charge that the Government must now address, but it makes a good contribution to that small part.

Ms. Dawn Primarolo: This debate arises out of the appeal of the Secretary of State against Lambeth. To judge from the contributions of Conservative Members, local authorities—especially Labour controlled authorities seeking to protect services—are wicked.
It is as well to remind the House of what the judges who heard the appeal in the Court of Appeal said. Lord Justice Glidewell said:
In my view there can be circumstances in which a council can properly decide, provided it bases itself solely upon the information which was originally in its possession, to adopt as the basis of its second calculation a different non payment rate. I am not persuaded on the material before us that Lambeth's resolution on 6 August 1990 was a breach of Section 35(5). I would therefore dismiss the application.
Mr. Justice Otton said that the Lambeth councillors had approached
their task with the utmost care … What happened in August was the substitution of one reasonable decision for another",
said Lord Justice Mustill. He went on to say:
In the growing conflict now in progress between central and local government for the control of local taxation, central government has the whip hand because it initiates legislation.

That blows an almighty hole in the Government's argument about whom people should look to for accountability in the administration of their funds.
Yet again we see that the law is based not on morality but on the political will of the day. This legislation is about making sure that the Government's desire to destroy local authorities by cutting the money provided for services succeeds.
What does the Bill set out to do? The formula is as follows. Under the proposals, if a council is capped, the new poll tax will be calculated by using the formula: new poll tax equals old poll tax minus old budget minus capped budget divided by the relevant population. That is supposed to make local authority finance more understandable, more accountable and simpler.
Furthermore, when an authority is capped and there is also a capped authority that precepts on it, the council has to calculate and undertake a separate substitution. That is what happens in Avon. Avon county council and Bristol city council are capped authorities. The problem with the formula is that it is based on various other decisions that continue to compound the agonising problems that local authorities face. For instance, the Government assume a 100 per cent. collection rate when the new poll tax rate is set, yet we know full well that 100 per cent. of the poll tax is not collected—just as the rates were never fully collected.
It is an important feature of this system of central Government support that the needs of assessment for an authority and its grant entitlement are established with no reference to the extent and quality of the services that it actually provides. For instance, an authority with no museums, art galleries or public parks, with no programme of support for the arts, and with no crematoria, will be in no way worse off under its SSA than an authority that provides those services.
Bristol was poll tax-capped last year by £10 million. If it spends on a standstill budget next year, it will need to spend about £62 million, but the Government have set Bristol's SSA at £41 million. So the council has to cut one third—£21 million—of its budget to comply with the SSA.
To meet that shortfall, Bristol council officers are recommending that members consider the closure of all swimming pools in the authority, the closure and selling off of Colston hall, which is the main concert and arts centre apart from the Old Vic, and the selling off of all open space. The planning committee has suggested that all concessionary bus fares be stopped and that we should phase out paying the charges for giro payments, which are paid for now by the local authority—

Mr. Andrew Mitchell: Is not the hon. Lady being had by the oldest trick in the book? Surely she is the victim of precisely what the Minister outlined in his speech. Of course officers will always draw up the most unpalatable and dreadful list of possible cuts, but did not the evidence that I produced from the NALGO newspaper demonstrate that when it comes to it, sensible economies can be made without implementing the sort of swingeing cuts proposed by the officers that the hon. Lady mentioned?

Ms. Primarolo: I am not persuaded by the hon. Gentleman's arguments or by his quotations from the NALGO newspaper. I should like to take a look at them. In view of the unfairness of the basic calculations in relation to Bristol city council, I do not think that I am being "had". Avon county council was poll tax-capped last


year and has to cut £26 million from this year's standstill budget if it is to avoid poll tax capping this year. That is a substantial amount.
The SSA for Bristol is calculated per adult head of population and that enters the formula for the setting of the new poll tax after capping. For Bristol it is £139 per head, compared with an average of £163 per head for what are referred to as the big nine, the nine large district authorities. Leicester, which has a population considerably smaller that that of Bristol, has an SSA of £236 per head. The figure for Nottingham is £184. However, Bristol, Leicester and Nottingham are all in the family of the big nine authorities. I am not questioning the amount that other authorities should receive, but merely pointing out how little Bristol receives.
The Average SSA per head for the big nine is 26 per cent. For Bristol it is 23 per cent. and for Leicester, which has the highest SSA, it is 31 per cent. The Secretary of State takes the view that the standard level of district services costs 70 per cent. more in Leicester than it does in Bristol. It is inconceivable that exactly the same services in Leicester should cost 70 per cent. more than in Bristol. The formula, which is acceptable to the Government, is crazy and Bristol is disadvantaged.
On that formula, the SSA produces for Leicester £46·3 million for an adult population of 196,000 whereas for Bristol it produces only £40·9 million for a population of 294,000. That same population formula will be used yet again to penalise Bristol if the political parties there are unable to identify £21 million worth of cuts. Local authorities are accountable to the electorate to provide services. The Government take the view that accountability is about making local government the puppet of their political will regardless of the views of local electorates.
The Government claimed that the poll tax was introduced to protect charge payers. It does not protect women in Bristol who have no income whatever but have to pay the poll tax. It is no protection for women there who will not receive services from carers, nor does it protect young mothers who have nowhere to take their children because the adventure playgrounds have been closed. The complexities and costs of the scheme work against local authorities. In Bristol it costs £5 million more to collect the poll tax than it did to collect rates under the old system. Less than 70 per cent. of people pay the poll tax.
The Government tell Avon and Bristol authorities to impose cuts and at the same time they impose legal duties. Those are the extra duties contained in the Education Reform Act 1988 and in what is left of the pitiful community care policy. Extra duties are also contained in the Children Act 1989 and there are extra but welcome duties in the Environmental Protection Act 1990. All those duties mean that local authorities have to spend money, and they are having to impose disproportionate cuts in other areas.
Avon is a joint police authority with Somerset. The precept percentage that the Home Office allows the police authority compulsorily to extract from a county council that is poll tax-capped is greater than the percentage by which the Department of the Environment is allowing Avon to increase its spending.
The Bill is not about dealing with excessive budgets, nor is it in the best interests of the poll tax payer. It is not about

accountability or about making the system easier. It is about destroying the services provided through local authorities by democratically elected councillors. Councillors all over Britain, regardless of their political persuasion, are finding it impossible to continue to provide services. Millions of people are simply unable to pay the poll tax.
A flat rate head tax is no substitute for a tax that is based on ability to pay. We should provide services based on need and not on the ability to pay for them. That exposes the Government's squalid action. They seek to pursue a tax that they no longer support and no doubt they will attempt further to amend it or scrap it so that they can save face at the next general election. That will not work. People despise the poll tax and will continue to oppose it. They will go on fighting for the services that they need, and that means opposing these additional measures.

Mr. Jacques Arnold: I understood that the advantages of the community charge were the simplicity and clarity which make it easily understood by the public. All our constituents know that the community charge is so much per head. That is clear to our constituents even if it is painful, and is much plainer than the strange concept of poundage on the notional rental value of their homes, which is theoretically calculated on a rental value produced in 1972.
The debate is about the tinkering with the documents of the community charge figures by Lambeth council in particular. Those figures are not easily understood by the general public. The figures concerned are the variables between the precepts and the final cash charge to community charge payers. Those precepts are the precepts of the county council, those of the borough or district council and those of the parish council etc.
The first variable is the safety net, about which there have been many rows. Every community charge payer in the borough of Greenwich is subsidised by the national charge payer to the tune of £212 per head. Southwark's charge payers are subsidised by £160 per head, while in Hammersmith and Fulham the subsidy is £111 per head. Despite that, all three councils are levying a high charge. It is odd that the Government have said that we should subsidise incompetent Labour councils at the expense of competent Conservative councils.

Ms. Mahon: What about Westminster? The hon. Gentleman should tell us about its external grant.

Mr. Arnold: Every community charge payer in Conservative Westminster has this year been paying into the safety net a surcharge of £75. That also applies to the charge payers in Kensington and Chelsea, Wokingham, South Buckinghamshire and Chiltern. All those district council areas, in which the voters are intelligent enough to vote Conservative, have nevertheless been ripped off to subsidise incompetent Labour councils. Even in the Conservative-controlled district of Gravesham, community charge payers are being ripped off to the tune of £15. Councils such as Lambeth are not able to tinker with the safety net, because that has been determined by the Government. Those of us who represent constituencies that have had to contribute to the rip-off this year are delighted to know that next year the imposition will be lifted from our constituents.
The only other variable with which councils such as Lambeth may tinker is the collection account. That is what we are talking about within the narrow confines of the Bill. Lambeth borough council varied the collection account contributions during the year for political ends. The collection account contribution is not a balancing item for account manipulation by councillors.
My hon. Friend the Member for Gedling (Mr. Mitchell) referred to the dancing on the steps of Lambeth town hall when the council achieved its narrow legal victory in the courts. It was a response to political imperatives and not to the fact that the sort of community charge being levied by Labour-controlled Lambeth borough council was far too heavy for the people of Lambeth to bear, especially for those under the most financial pressure, about whom the Labour party likes to talk but for whom it seems never to act. It is on the collection account that the shortfalls in collection are to be seen.
What about the charge made on individuals within the component total figure for the collection account? This year, every council in the land has inevitably had to estimate what funds it would have to raise to make up the shortfall arising from late payment or no payment. Next year, when councils come to work out how much should be charged per head to the collection fund, they will be able to do so on the basis of a track record. The various track records are now becoming evident.
The figures of collection by August provide us with a guide to competence. By the end of August, an average of 83 per cent. of the charge payers within good Conservative-collecting authorities had already paid up towards the community charge. In Labour authorities, there was already a disparity, because on average they were collecting from only 74 per cent. of charge payers.

Ms. Primarolo: Will the hon. Gentleman explain why Bath, which is a Conservative council, has achieved a collection rate below 70 per cent.? Is that because it is an incompetent Conservative council?

Mr. Arnold: If the hon. Lady were to examine the figures, she would find that Bath is already well up the table. Underneath it, with lower collection figures, are Labour-controlled councils which are to be counted by the dozen.
A study undertaken by The Guardianfound that the worst four collecting authorities were all Labour-controlled. At the end of August, Hackney had collected from only 56 per cent. of its charge payers. In other words, 44 per cent. of charge payers in Hackney had paid nothing. In Liverpool, 42 per cent. had paid nothing.
In Lambeth, the very borough with which we are concerned, 40 per cent. had paid nothing. That is not especially surprising, because the council has still not collected the full rates income for the final year of the rating system, as it had not for years previous to that. I believe that the shortfall goes back to the financial year 1984–85. That is the last year for which Labour-controlled Lambeth had completed its accounts.

Ms. Primarolo: Does the hon. Gentleman agree that non-payment rates are more likely to be connected, or connected entirely, with people's ability to pay, and that the areas to which he has referred are those in which there is great social stress and increasing poverty? Surely those

factors would account for many non-payers, or a large proportion of them. There are many who simply cannot afford the poll tax.

Mr. Arnold: That argument will not wash. The hon. Lady has not mentioned that the community charge rebate covers a greater proportion of payers than did the rate rebate. She will find no correlation between non-payers and poor people. If she examines the curve of effective net amount to pay, she will find that those who are at the bottom of the financial pile are not those most heavily impacted by the community charge.
The hon. Lady referred to the borough of Bath and its collection. At the end of September, 77·1 per cent. of the charge payers of Bath had paid up their community charge. She did not mention, for obvious reasons, that in Bristol, which has an incompetent Labour council, only 65 per cent. had paid up. I wonder whether the hon. Lady has been encouraging her constituents to abide by the law and pay up.

Mr. Wareing: Perhaps the hon. Gentleman will be interested to know that I have paid no poll tax to Westminster city council. He might wonder why I have not. That "efficient" Lady Porter-led Conservative council managed to send out my demand form only last week. Has the hon. Gentleman undertaken any research to ascertain how many councils, such as inefficient Westminster council, which is so busy selling cemeteries, have not got round to sending out demand notices?

Mr. Arnold: As the hon. Gentleman has referred to his own position, perhaps he will tell the House about his arrivals and departures to and from addresses and whether those movements have any bearing on the late arrival of his demand notice.

Mr. Wareing: I have been at the same address for over three years.

Mr. Arnold: I cannot account for the late arrival of the notice. I shall check the level of collection of Westminster city council, which no doubt is very much higher than that which has been achieved by the borough in the constituency which the hon. Gentleman represents.
In Nottingham, 30 per cent. of charge payers has not begun to pay by the end of August. I suppose it is not surprising to find that the collection record of a litany of Labour-controlled cities and boroughs is a low one. Labour councils and Labour Members give little or no encouragement to people to abide by the law and pay the bills for their public services.

Mr. David Nicholson: Does my hon. Friend agree that it is important for Ministers to consider in their review of the charge and its administration the fact that non-payment of the charge, which produces a shortfall, should not be passed on to the law-abiding majority to pay the following year, and that possibly the capping mechanism that we are debating should take account of the failure of councils to raise that money? Instead of the law-abiding majority having to pay for the malingerers, spending should be cut to provide for the shortfall.

Mr. Arnold: I think that what the law should provide, for, and what all councils should do, with enthusiasm and energy, is the pursuit of non-payers. There is no doubt that it is immoral for certain people not to pay the community charge and to expect the remainder of the public to foot


the bill. Fortunately, the overwhelming majority of councils have got on with the job of collection. The figures show that over 90 per cent. of charge payers are paying their community charge. That is not dissimilar to the proportion of those who were paying rates at this stage of the financial year.
Some effective Conservative authorities are doing far better than the average. For example, Medina, on the Isle of Wight, has estimated that it has already collected from 96 per cent. of its community charge payers. Poole, in Dorset, claims 93 per cent. I congratulate the Conservative-controlled Gravesham borough council on already achieving a 93 per cent. collection rate. That is well ahead of the average.
The rate of collection and the effect on the collection account will be reflected in the contribution that is levied next year by the collecting authorities. Then the chickens will come home to roost. Labour councils have been the most inefficient and the least co-operative and, as always, they pass on the bill to their charge payers. It will be interesting to compare the charge levied next year by high-charging Labour councils and that levied by low-charging Conservative councils.

Mr. Bob Dunn: Does my hon. Friend accept that the blame should be attached not only to Labour-controlled councils, but to those misguided individuals who have led non-payment campaigns, such as that in Swanscombe in my constituency? Such people need taking to task for bombarding innocent people and persuading them not to pay the tax, in pursuit of some misguided fiscal notion.

Mr. Arnold: My hon. Friend has cases in his constituency, as I have in Gravesham borough, of people not paying their community charge. One Labour councillor in Gravesham is not paying her community charge and is therefore passing on the cost of local services to her neighbours, whether or not they are poorer than she is. There is a deafening silence from the Labour group on the council, which says that it is nothing to do with them, as there is a deafening silence from the Opposition Front Bench.
Charge capping is sadly necessary because of such actions. It protects residents from Labour councils' irresponsible control of finance. People want that protection. Last April, Gallup conducted a poll to determine whether people wanted charge capping. It is interesting to note that 53 per cent. of the public want a limit on the extravagant spending of local authorities. It is a salutary comment upon the Labour party that 43 per cent. of Labour voters want charge capping. It is obvious that the Opposition Front Bench is out of touch with Labour voters.
All voters, including Labour voters, are right to fear the possibilities. The rip-offs are evident. I shall cite the original announced intentions of Labour councils before their charge payers were saved by capping. Were it not for the generosity of the Government's safety net, people in the London borough of Greenwich this year would be paying £620. In fact, other charge payers are subsidising Greenwich residents to the tune of no less than £212 per head. Greenwich has a traditionally wasteful Labour council.
Lambeth, which we are discussing today, has a real rip-off of £575, not the original £548 that it tried to levy on local people. Haringey's rate is £573. Southwark would have had to charge £550, were it not for a subsidy of £160. Hammersmith and Fulham would have levied a charge of £535, but for the safety net contribution of £ 111. I could go on and on. The only consistent link between those authorities is their tradition of Labour dominance.
If we want to contrast the behaviour of Conservative and Labour councils, we have only to wander through the shire counties. In Avon, Bristol's real charge is £513. The other councils, invariably Conservative, average £400. In Cambridgeshire, Labour-controlled Cambridge council charges £376 and Labour-controlled Peterborough £345. The Conservative-controlled districts in the county have an average charge of £280. In Essex, Labour-controlled Basildon scores £440 and Labour-controlled Harlow £420. The largely Conservative remainder score in the low three hundreds.
In Hertfordshire, Labour-controlled Stevenage grabs £410 and Labour-controlled Welwyn and Hatfield £396. The remainder charge £330. Labour-controlled Leicester charges £429, while the remainder of the county districts charge £340. Labour-controlled Norwich charges £365, while the remainder of Norfolk charges about £300. Labour-controlled Crawley charges £332. Liberal-controlled Adur also charges £332, but the Liberals are not worried about the people of Adur—no Liberal Democrat spokesman has turned up for this debate. The remainder of the West Sussex districts charge about £270.
In Greater London, Westminster's real community charge is not the laudable £195 that the hon. Member for Liverpool, West Derby (Mr. Wareing) has not got around to paying; it is actually only £120 without the maximum safety net levy of £75. The London borough of Croydon sets a real rate of £225 without its safety net contribution. Those are Conservative councils in action, charging a low community charge and giving better value to their charge payers. In the metropolitan boroughs—sadly, almost entirely controlled by Labour—the lowest real community charge levy is by Conservative-controlled Trafford at £268.
Charge capping has saved people real money. In Hammersmith and Fulham, the Government have saved every charge payer £99 this year. In Southwark, the figure is £86; in Greenwich, £65; in Barnsley, £59; and in Derbyshire, £56. That affects real people. They must reflect upon the fact that their Labour councils hammered them regardless, but that this Conservative Government have saved them from such irresponsible charging.

Mr. William O'Brien: I am interested in the comparisons that the hon. Gentleman is drawing. Perhaps he would comment on his Department's suggested average charge for the coming year of £380, compared with £278 this year. How does he justify that 33 1/3 per cent. increase for every poll tax payer in the country?

Mr. Arnold: The figure is based on the standard spending assessment suggested by the Government. It is for councils to decide whether they need to spend up to that assessment. Neither my county nor my borough expects to be banging on that limit.
Inherent in what the hon. Gentleman is saying is the fact that Labour councils cannot save money. Let us consider the facts and the track record of Labour councils.


We need go no further than the London borough of Brent, and I need only quote the hon. Member for Brent, East (Mr. Livingstone). In August, he wrote in New Socialist:
If you have a council that is as monumentally incompetent as Brent's been in the last few years, it rightly gets a major role of censure from the public.
For once, I agree with the hon. Gentleman. The people of Brent threw out the Labour council last May. The incoming Conservative/Liberal Democrat administration had to ask an audit team to investigate how, under a Labour-controlled authority, £4 million of books had disappeared from the borough's libraries during the previous four years. Books had been disappearing at a rate of almost 2,000 a week, with a loss to each Brent charge payer of almost £21.

Mr. Holt: As a former member of Brent council, I remind my hon. Friend that Brent town hall used to be the town hall in Wembley. It was built in 1938 and had been fully paid for by the time Brent came into being. It was then sold and leased back to the Labour administration so that it would have more money to spend on its wildcat schemes. The community charge payers of Brent would have been much better off if there had never been a Labour administration.

Mr. Arnold: My hon. Friend is right. That kind of financial jiggery-pokery was repeated time and again by Labour councils throughout the country, who had the funny idea that they could spend today and somehow be looked after tomorrow—presumably by an incoming Labour Government. It is clear that there will be no Labour Government, and those chickens are coming home to roost for the charge payers in the boroughs concerned. They certainly do not like what they see.
Camden council spent £70,000 per year on a lesbian day centre, and Labour-controlled Derbyshire county council held a party to celebrate Nelson Mandela's birthday at a cost to local charge payers of £2,000. Derbyshire also spends more than £1 million on its information services and local newspaper, £600,000 on its equal opportunities and race relations unit, and £111,000 on giving councillors free trips abroad to sponsor twinning agreements.

Mrs. Edwina Currie: Is my hon. Friend also aware that, of the total staff employed by Derbyshire education authority, fewer than half are teachers? Most of the money is spent on administration, advisers, and all the rest of the paraphernalia with which the county council seems to think education should be surrounded.

Mr. Arnold: That speaks for itself. Not only is Derbyshire levying a high community charge, but, as my hon. Friend has clearly shown, charge payers are not getting value for even that vast amount of money, because most of the budget goes on the administration of which Socialists are so fond.
The squeamish might not like to hear that Labour-controlled Islington borough council is offering free condoms to residents who are going abroad on holiday.

Mr. David Blunkett: On a point of order, Mr. Deputy Speaker. The council is not operating that scheme. It has been withdrawn.

Mrs. Currie: Withdrawn? Is the hon. Gentleman sure?

Mr. Blunkett: Yes, I am sure. I made a point of checking—[Laughter.] Perhaps I should rephrase that. Condoms are no longer being made available, and when they were, that was done under the health education programme, with Islington struggling to retain staff, a nd finding that very difficult under poll tax capping. Nevertheless, it was provided with Government money to employ nine people to work on that particular function.

Mr. Arnold: It seems that, until such matters are exposed—if that is the right work—Labour councils just blunder on. Apparently it never occurred to that Labour authority that people able to afford a holiday overseas would also be able to afford their own condoms.
How many people are aware that Labour-controlled Southwark council has been spending £100,000 a year of charge payers' money on a trade union support unit—whatever that might do? How many people are aware also that Southwark's lesbian and gay unit, in partnership with Labour-controlled Lewisham council, held a leadership, gay consultation and cultural evening with a buffet, cabaret and disco? That is the kind of event on which Labour likes to spend money—and then it sends the public the bill.
The community charge has become a matter of controversy in recent days, but it has highlighted council spending and competence. It could be argued that the community charge is working because it allows the public to see what their councils are up to, and to respond accordingly. Last May, the electorate chucked out incompetent councils such as Brent, which was roundly condemned by the hon. Member for Brent, East. Labour councils were also chucked out at Ealing, and at Hillingdon.
It is a pity that capping is necessary, but the Bill will close a loophole that has possibly made that device somewhat ineffective.

Mr. John Fraser: Perhaps it is appropriate that I should follow the hon. Member for Gravesham (Mr. Arnold), because, although we are not witnessing the burial of the poll tax today, we are seeing the beginning of the funeral procession, as some of the remarks about my own borough of Lambeth have illustrated.
One or two hon. Members said that Labour councillors were dancing on the steps of Lambeth town hall when the courts upheld a poll tax of £522 against a Government figure of £493. That shows why the poll tax has failed, and the Bill is a measure of its failure. Every Government of every political complexion of the past 20 years has been concerned about local government expenditure. I know that that is true from the time when I was a Minister. The present Government took the matter somewhat more seriously, because this is the 50th or 51st piece of local government finance legislation that they have introduced since taking office. The Government have been at pains time and again to limit by statute the amount that councils can raise by rates or, now, by the poll tax.
The Government have grown tired of rate capping because it involves detailed interference in local authority planning. The only good thing that can be said for the poll tax is that it brought the Government to the conclusion that such decisions should be taken not by central Government but by the electorate. The purpose of the poll tax was to allow electors to choose. Incidentally, I do not


believe that there is any political mileage in knocking on doors in my constituency and saying, "I think that the poll tax should be much higher than it is." I have enough experience and political sense not to do that—and I saw what happened to those of my political friends who did, such as Eric Deakins in Walthamstow. One does not go around arguing for much higher poll tax.
The Government reached the conclusion that control of local government expenditure ought to rest not with central Government but with the electorate, which was the thinking behind the Local Government Finance Act 1988.
Before the people of Lambeth voted in May's council elections, they knew what the poll tax would be. The figure decided upon by Lambeth council was £548, and that forecast by the Government in a written answer two years ago was £547, so the council was only £1 out. In constituencies such as Streatham, there was a Labour swing of 10 per cent., and Labour also captured council seats in my constituency. I do not say that that pattern was repeated throughout London, but the electorate were happy to make their decision from one borough to another. The sign of failure is that the Government were not prepared to stand by the electorate's judgment. Lambeth is a case in point. The people knew what the level of poll tax would be, yet the Government chose to interfere with that democratic choice.
Earlier this year, the former Secretary of State for the Environment said that he intended to limit Lambeth borough council's budget, and I asked the right hon. Gentleman whether he was sure that limiting the council's level of expenditure was the same thing as limiting its poll tax. My legal advice was that the two were not the same, and it transpires that I was right and that the then Secretary of State was wrong.
I believe that I know why he was wrong. I think that, when the Government drafted the poll tax legislation, they did not intend to introduce capping. If I remember rightly, capping was imposed at quite a late stage during the passage of the legislation. It was an afterthought because the then Government believed that it was not necessary and that the electorate would take the appropriate action. Quite apart from the basic inequity of the tax, the fact that that strategy has failed shows that the Bill is part of the Act's burial, because the automaticity of control of local government expenditure by the electorate, rather than by Government, failed.
Earlier in the debate, the problems of Lambeth and its failure to collect the rates were mentioned. I do not excuse that failure. People come to me with rate demands which in some cases go back seven or eight years. Sometimes they make many visits to the local rates office and they end up with a rates bill which varies from £2,000, in my mother's case—she has been to the rates office about 20 times—to £7,000. I do not excuse that sort of inefficiency. It causes me a lot of worry when people receive bills which go back such a long time.
Some local authorities had low levels of rate collection in the past and have a low level of poll tax collection at present. We need to ask ourselves why the collection levels are so low and why some boroughs meet such difficulties. There are a number of reasons which I think that the Government have not fully understood.
I represent the second most deprived borough in the country. Poverty stalks many parts of the borough, so there is bound to be a low poll tax payment because people simply cannot afford to pay. Old-age pensioners and people on income support have to find £12 a month to pay their water rates, never mind the amount that they have to find for poll tax. Until the Government changed the housing benefit rules by introducing capital disqualifications, almost half the population in my borough—including many owner-occupiers—received housing benefits. On many council estates almost a quarter of all tenants were in receipt of income support.
Therefore, the borough has a huge level of poverty and dependency upon state benefits—income support, housing benefit and the like. If we add to that the great mobility in such boroughs, we get some idea of the problem. A good exercise is to compare the electoral register from one year to another as it gives some idea of how many people move in and out of the borough in that time. In my constituency between 16 per cent. and 20 per cent. of the population change, and the percentage is probably higher in other parts of the borough.
We have a combination of a high level of poverty and great mobility. That is why it is so difficult to work out housing benefit. Added to that, the Government are constantly changing the housing benefit rules. It becomes almost impossible to keep up with rate rebate, housing benefit, and poll tax rebate calculations due to that combination of poverty and mobility. That is why the collection level is so low, although I agree that it is not the only reason.
Therefore, the local authority quite reasonably assumed that it ought to calculate for a lower level of collection than had previously been anticipated, and that assumption was confirmed by the courts. It was not an unreasonable decision—no one could have foreseen the rate of collection in Lambeth, Bath or anywhere else.
The result of the Bill will be that the reduction in budget will be translated into a reduction in poll tax. Incidentally, I do not have any difficulty in understanding a simple arithmetical equation. I would have hoped that the hon. Member who aspires to be the leader of the Liberal party would not have so much difficulty with algebra. The arithmetic is simply stated in the Bill, and I have no objection to the algebraic formula.
In real life, the problem is that, if the Government translate the budget reduction into a poll tax reduction, and there continues to be a low level of collection, the consequence will be a double cut in local services. There will be one cut because the budget is depressed and a subsequent cut because the collection level will decrease and services will not be supported.
Do not let anyone be deceived that services have not been cut, and that such cuts are not causing great problems in our boroughs. In my borough, as in many others, swimming pools are closed every morning at a time when they should be used by schools and unemployed people because it is simply not possible to keep them open. Almost all the voluntary organisations are facing across-the-board cuts because of capping. Other essential services are also being cut, and it does not merely apply to Lambeth—exactly the same is happening in Wandsworth, without poll tax capping.
Wandsworth has a form of poll tax capping because it is under pressure to keep the poll tax down, in exactly the same way as Lambeth is statutorily bound to do so. The


same thing is happening in Wandsworth—voluntary organisations are being penalised, care schemes for children have been cut, free law centres have been closed, and a whole range of services, which have been supported by the Conservative council for many years, have been reduced.
The consequence of the Bill will be two kinds of cuts—one caused by the reduction in budget, and the second by a low level of collection of the tax, which in turn flows from the poverty created by the Government. In my borough, unemployment is now three times as high as it was when the Government took office in 1979.
Today, we are witnessing the beginning of the funeral procession for the tax. It is true that the undertaker was unable to speak today—he had to send his assistant along. However, by the time we debate the subject on Wednesday, I hope that, if we cannot see the funeral procession, at least the burial will be in sight.

Mr. Martin M. Brandon-Bravo: The Bill gives further legislative basis for limiting local authority spending and therefore puts a mechanism in place to protect those whom I know are officially called charge payers, although I am quite happy to call them poll tax payers. The House has a duty to protect our constituents, and the Bill does so.
Given what happened in the city of Nottingham and the county of Nottinghamshire upon imposition of the first year's tax, I have no hesitation in supporting the Bill. The chairmen of the city finance committee and of the county finance committee wrapped themselves in the proverbial cold towels to try to see how high they could set spending without breaching what they estimated to be the ceiling or the cap that the Secretary of State would impose once he had seen the figures that they set for their first poll tax levy. I know that is more than a mere rumour, and I am happy to try to protect my constituents until such time as the issue can be reviewed, and we can put it properly on track.
The principle that central Government have a duty and a proper responsibility to control the totality of public spending is not in dispute. Opposition Members keep crying that we are interfering with local government spending. They seem somehow to ignore the fact that local government spending is a part of public spending, and, it is right and proper that the House should have a say in it.
I think that the right hon. Member for Manchester, Gorton (Mr. Kaufman)—in what capacity I cannot recall—years ago made a major speech and made it very clear that the House had that responsibility. The hon. Member for Norwood (Mr. Fraser), who said that he was a Minister at the time, will agree that, when the right hon. Member for Bethnal Green and Stepney (Mr. Shore) was Secretary of State for the Environment, he operated a voluntary system of constraint. In those days, most local authorities—certainly Nottingham city council—were Conservative-controlled.
I was one of Nottingham's councillors, and, given the financial mess into which the Labour Government had got themselves, that move seemed perfectly right and proper. The right hon. Member for Bethnal Green and Stepney—using, I believe, the usual method of issuing circulars—sought to rein in spending in the middle of the year, and we were all asked to exercise constraint. At the end of the year, largely owing to the co-operation of Conservative

councils throughout the country, the Labour Government managed to recover some £1,000 million. Given that all this happened 13 years ago, I think that the House will agree that that was a very large sum to recover by means of a voluntary clawback.
The sad fact is that—as the hon. Member for Norwood pointed out—the present Government did not receive the same voluntary co-operation from local authorities. That is why they had to embark on a legislative scheme to limit authorities' spending. I believe that it is largely the conduct of Labour authorities that has brought about this sad but necessary process; I am only sorry that we did not impose a tough spending limit in year one. I am not sure, even now, that the cap is tight enough to protect many of our long-suffering constituents.
Many hon. Members have been in politics for a long time, either in the House or in local government. I do not recall a single occasion on which an opportunity has arisen to raise extra money on the quiet—because of, for instance, a boundary change or a revaluation—when local authorities have not used their opposition to change to jack up their charges on local people. I confess that has been done on both sides of the political fence: every local politician, regardless of his political colour, has his pet projects. Following a revaluation, we knew exactly what would happen. It used to be an extra couple of coppers; now money is no object.
We knew from experience that this changeover would mean people being crippled by additional charges. I am sorry that my senior colleagues did not see the obvious at the time, but that is all water under the bridge; we are now trying to address the current problem. I know that I am oversimplifying matters, and I acknowledge the force of all the arguments about reserves, balances and so forth. Nevertheless, I think that I am right in saying that, if local authorities had been told last year, "You may spend everything that you spent last year, plus the rate of inflation"—which would have protected every teacher, every nursery nurse and every other worthwhile social provision—£2,500 million less would have been levied on our taxpayers in April. Limits on spending all over the country would have prevented that excessive spending.
The Opposition tell us that we should not limit local authority expenditure. I believe that the sum that I have mentioned works out at about £70 for each adult in the country. I can tell the House that my constituents would have been delighted to pay £70 less than they did. Some form of capping must be imposed this year to stop a repetition of that, and to protect our constituents from the consequences of the gay abandon with which local authorities have been spending other people's money.
There was no doubt in anyone's mind that last year's community charge in Nottinghamshire could have been £290, perhaps £300, but it was set at £390. Within two weeks, 10,000 people in the city of Nottingham had signed a petition welcoming the possibility of the then Secretary of State's imposing a cap on the city and the country.

Mr. Frank Haynes: The hon. Gentleman is suggesting that Nottingham should reduce its poll tax charge. He must be aware that Nottinghamshire county council is wrestling with itself to save 12 elderly people's homes from closure. What does he expect Nottinghamshire people to go without to keep those homes open?

Mr. Brandon-Bravo: I am grateful to the hon. Gentleman for bringing the county council's disgusting conduct to the attention of the House. I am glad that he has brought it up, because, if he had not, I should have done so myself. I think that the council's conduct is just about the most disgraceful act by a local authority of which I have ever heard.
The hon. Member for Ashfield (Mr. Haynes) knows very well that, since his party has been in charge in Nottinghamshire, some 5,000 more employees have been put on the payroll. The council cannot introduce that volume of staffing and then say that it cannot afford to keep old people's homes open.
Labour Members are right in saying that, as a result of the £390 charge, seven out of 10 of my constituents are worse off. If, however, the charge had been £290 or £300—as any reasonable person who examines the books will know that it could have been—seven out of 10 families in my constituency would have gained. I do not wish to use the "gainers and losers" argument in relation to the Bill; suffice it to say that, as the hon. Member for Ashfield knows very well—he has read it in our local press, and heard the chairman of finance speaking on the radio—his council set a charge that included, over and above its previous year's expenditure, an additional spending programme of £104 million, spread over four years. It is interesting to note that that period is the same as the lifetime of the Labour authority. The additional spending was to be "front-loaded" into the first couple of years, which meant an extra charge of £147 for every adult in the city and county of Nottingham.
The old people's home in my constituency was not opened only last year; it has been there for 30 years. It is a super place. It is well run and the people love it: it is part of the community. It must have been part of Labour's budget before the extra £104 million was stuck on. The money is clearly there, but Labour has different priorities. Labour says, "To hell with the old people." We have seen the same thing time and again. This side of the House is often accused of knowing the cost of everything and the value of nothing, but at least we on Conservative Benches do not play jiggery-pokery with the lives of our elderly people. Opposition Members do not give a damn. If the Opposition can make their point, that is the way they will play it.
We have to protect innocent people in our constituencies who are affected by unreasonably high poll tax charges. I wanted accountability; I wanted the voters in my constituency to know that the bill that came through their door was something for them to decide. However efficient or inefficient the city of Nottingham may be, the problem is that more than 80 per of the bill that comes through the door is set by Nottingham county council. The sooner the city of Nottingham runs its own affairs, separate from the county, hallelujah—the better it will be.
I said earlier that I am concerned about whether the Bill goes far enough. My fears arises partly out of the experience in Lambeth. Lambeth council argued that it was entitled to take a different view of the information that was in front of it when it set the budget. When the Government said that they wanted to cap Lambeth, the council said that it wanted to look again at its information. We allowed Lambeth to take, as it put it, a different view.
Having done that, the council argued that it did not have to pass on the full benefit of budget reductions to its poll tax payers. The point has already been made, but it is

worth making again, that, if central Government give local authorities more money, which they spend on other projects, the poor old poll tax payer is landed with the same bill. It is just more spending that results in no benefit to the community charge payer.
What also worries me is the problem caused by those who will not pay. I have no doubt that there are many people who cannot pay. We shall want to look at their cases carefully. I have much sympathy for those who, for a variety of reasons, find themselves in circumstances for which they could not have been expected to budget. I refer to the budgeting of two people; I do not refer to the three, four or five-person households. That is a separate argument. If there are five wage earners in a house, they should all pay. The ordinary two-person household that finds itself with a bill that it could not have anticipated falls into the category of those who cannot at this stage find the full amount. However, I have no sympathy whatever for the "won't pay" brigade.
To illustrate my point, like most of my hon. Friends I, together with other Conservative party workers, deliver party literature. That is how we try to get our message across to our constituents. When I visited one of the council estates in my constituency—it is the second largest in the United Kingdom—I stopped some distance away from a beautiful house. It was clear that the owners had bought it under the right-to-buy legislation. It was a corner house, so it stood the maximum chance of enhancement. There was a beautiful wrought-iron gate in the run-up to the front door, another beautiful double wrought-iron gate had been provided for the garage, the house had been excellently rendered and there was delightful stone edging down the side of the drive. I stood back and thought, "Smashing."

Mrs. Currie: And my hon. Friend thought, "I'll get a nice big contribution here."

Mr. Brandon-Bravo: My hon. Friend does not know how wrong she is. I thought that they had done a magnificent job on the house. I am neither a surveyor nor an architect, but I know that the average family on that estate spend £5,000 on their house when they purchase it. I thought to myself, "I bet these people didn't get much change out of £10,000." However, as I walked down the path to deliver my literature I saw in the window a "won't pay" sticker. It illustrated beyond argument that there is a substantial number of "won't payers". No hon. Member should sympathise with the "won't payers". There is a big difference between those who will not pay and those who cannot pay.

Mr. Dennis Turner: Just because the hon. Gentleman saw that the people who lived in that house had put a "won't pay" sticker in the window, why does he draw the conclusion that that family can afford to pay the poll tax? The hon. Gentleman said that those council house tenants must have purchased their home and spent money on it. They may, however, have fallen on hard times and found it difficult to make their poll tax payments. Why is the hon. Gentleman so patronising about people who live in council houses on council house estates?

Mr. Brandon-Bravo: I am not being patronising.

Mr. Turner: Yes, the hon. Gentleman is being patronising.

Mr. Brandon-Bravo: No, I am not. I am proud to say that 5,000 of the 9,000 properties on that estate have been bought. I say, "Well done," to those home owners; I am delighted. I hope and pray that in due time the remaining 4,000 council house tenants will have the same chance to buy their homes. Even those who rent their homes have full security of tenure as a result of this Government's legislation. Many council house tenants look after their homes as if they were their own. Sometimes one cannot tell the difference between the two. I am delighted for them all. It is first-class.
The hon. Member for Wolverhampton, South-East (Mr. Turner) asks how it is that I know that someone who lives in a very nice house can afford to pay the poll tax. Is that right?

Mr. Turner: Yes.

Mr. Brandon-Bravo: Is not that precisely the argument against the property tax that you lot want to go back to? How can the Opposition say that because someone lives in a nice house, it follows that he or she has lots of money? The Opposition cannot have it both ways.

Mr. O'Brien: I must put the hon. Gentleman right. He has been misled by the information that he has had from the Tory Central Office. Labour's policy is to introduce a rebate scheme to take into consideration the plight of those who cannot afford to pay the poll tax. Does the hon. Gentleman support the poll tax or does he disagree with it? Does he believe that those who cannot pay should not be included in the scheme? What is he on about?

Mr. Deputy Speaker: The hon. Gentleman ought to return to the terms of the Bill.

Mr. Brandon-Bravo: I wish to stick to the terms of the Bill, Mr. Deputy Speaker, but I am sure that you would not wish me to be accused of ducking the question. To the principle that every adult should pay something, I say, absolutely yes. I do not believe that the people in the house that I described fall into the category of people who cannot pay. Their poster said "won't pay". There is a difference between "won't" and "can't".
Those who will not pay impose a burden on the bulk of the population who wish to abide by the law and pay their dues to society. Rumour has it in the city and county of Nottingham that in order to make up for those who do not pay, my constituents will land up with a bill that is £50 a head more than would otherwise have been the case. That is completely unacceptable. My constituents deserve protection sfrom highway robbery.
The Government are seeking to limit spending. What bothers me is that, having limited spending, they will not be able to translate the legislation into a limit on the community charge that the local authority sets. If, for example, the local authority says, "Our spending will mean a charge of £300, but because we do not want to pursue collection we shall charge everybody £350," will the Bill offer the protection that I am seeking?
I understand that if a large excess were levied on the poll tax payer merely to cover non-payers, my constituents may be protected by the district auditor or by an audit of some kind. I am not sure that is such a quick and clean process. I earnestly ask my hon. Friend the Minister to address that problem. If, after we have passed useful legislation that gives local authorities the criteria by which they can spend—we have made generous support

settlements; nobody can say that the Treasury has not undone the purse strings and coughed up a fair slice of the cake to ensure that local authorities can meet the criteria—they impose a charge cover the non-payers, we shall have done a grave disservice to all our constituents.

Mrs. Alice Mahon: We all know that the Bill is about the Lambeth loophole, but I welcome any debate on capping, which we in Calderdale lived through last year, despite setting the fourth lowest poll tax in the country. Nobody could have called £297 excessive. Unless we make cuts of £9 million, we shall be in the same position this year. [Interruption.] I am sure that the Minister will get plenty of time to reply to the debate. I hope that he will listen to one or two of the points that I make.
The Minister for Local Government and Inner Cities said that he could not understand why councils did not want to reduce the full cap for hard-pressed poll taxpayers. I thought that that was quite a cynical and unnecessary remark. He knows perfectly well that no council wants to set the poll tax higher than it needs. It is daft to suggest that councillors want to do that. He does not seem to accept the reason for the existence of councils. Their purpose is to provide services. For example, if they cannot provide home care services for an elderly person who has no other means of income apart from the state pension and income support, they believe that they have failed that old person, who cannot rely on the private sector to provide what might be a life-saving service.
Last week, I went to see the Secretary of State about Calderdale's budget for next year and to try to avoid capping. We argued that, once again, we had been granted an unfair allocation under the standard spending assessment. Calderdale's SSA has been increased by 17·7 per cent., which compares unfavourably with the average for metropolitan districts in West Yorkshire of 19·2 per cent. It compares unfavourably with the average for all metropolitan districts of 19·1 per cent. and with the average increase for shire districts of 28·2 per cent.
We asked the Minister why Calderdale is receiving less favourable treatment and, more specifically, why the reasonable and long-expanded argument that Calderdale's normal highway maintenance costs are high has been continuously ignored, despite Minister after Minister accepting our case on the highways budget. We were listened to in polite silence but were not given any hope.
I do not want this issue to be confused with the winter maintenance costs. Normal maintenance costs should take into account the high altitude of much of Calderdale's area and the associated gradients, which result in weather causing more rapid deterioration of the road surface. That is never taken into account when assessing the normal maintenance costs for Calderdale. We convinced previous Ministers that we receive an unfair allocation, but we were listened to in complete silence.
The total budget for all councils in 1990–91 has been increased by only 7 per cent., which is almost 4 per cent. less than inflation. There is no getting away from that fact, and I should be interested to hear the Minister's comments on that. For Calderdale to avoid the poll tax cap yet again, it must set a budget within 5 per cent. of its SSA target. That effectively means, given inflation and assuming that what little remains of its reserves are not used, that the Government are prescribing a cut in expenditure on


Calderdale's services of approximately £9 million. The Minister gave us no hope, but that is the reality for next year if there is no improvement or relaxation in the rule.
I shudder to think what will happen if West Yorkshire fire and civil defence authority suffers the effects of poll tax capping. The fire authority provides an excellent fire and emergency rescue service to more than 2 million people across five districts in west Yorkshire—Leeds, Bradford, Kirklees, Wakefield and Calderdale. The county's 51 fire stations are staffed by 1,980 whole-time firefighters and 239 retained firefighters.
Thirty-six of the stations are staffed 24 hours a day, including the one at Sowerby Bridge in my constituency. I mentioned that station to the Minister when I joined a delegation protesting about the threatened cut in the fire authority. The threatened closure of Sowerby Bridge is causing local people much concern. The authority's technical services committee is considering the closure, but I must tell the Minister that there is deep concern in the community and in the surrounding area, because that fire station provides not only a good service to Sowerby Bridge but an excellent service to surrounding villages, industry and remote communities in Calder valley. If we lose that fire station, lives will be placed at risk and property will be unnecessarily damaged.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): rose—

Mrs. Mahon: I know what the Minister is going to say but perhaps he will allow me to finish my point.
West Yorkshire fire service provides a brilliant service. To give some idea of its value to people in the area, in 1989–90 there were 582 injuries, 124 people received burns, 104 people were rescued and there were 45 deaths. If the programme of cuts goes through, those statistics, bad as they are, will treble.

Mr. Key: The hon. Lady will recall that when she came to see me last week I congratulated her fire authority on carrying out its fire cover review, unlike one of her neighbouring authorities. The trouble is that it will not consider what to do about it until next March, some five years after it initiated the review.

Mrs. Mahon: I am sure that the Minister will not mind if I deal with lives and the facts about the service, which we believe is so vital in West Yorkshire. This year and next year, the fire authority is facing a deep financial crisis, which will put at risk the excellent service that it provides. To set next year's budget according to the Department of the Environment's SSA—£44·6 million—would mean sacking 500 firefighters and closing five fire stations. The Minister knows that: he has the facts. If the authority sets its budget at SSA plus 12·5 per cent.—£49·5 million—which is the maximum allowed if it is to escape poll tax capping, it will still be £3·5 million short of the £53 million needed to protect services and just to stand still.
The Minister listened to us with courtesy. Having been on many such visits, I can say that it was one of the better experiences I have had. Being an optimist, and believing the Minister to be a reasonable man, I cannot imagine that he can now contemplate capping that service. We hope for

some form of de minimis provision. We explained in some detail what we meant by that and I shall not cover the ground again now.
As I said, I made a special plea for Sowerby Bridge in my constituency. The closure of the fire station there would lead to loss of life and great damage to property—quite unnecessarily so. With the recession and the loss of so much, Sowerby Bridge is suffering enough as it is. That small town needs everything that it can get and, in my opinion, the loss of the fire station would take the heart out of it.

Mr. Holt: Will the hon. Lady confirm that one of the losses to her constituency recently has been that of a Labour councillor, whose seat the Conservatives won on a 14 per cent. Swing?

Mrs. Mahon: I can also confirm to the hon. Gentleman that we have just gained a seat from the Conservatives with a 15 per cent. swing, so it is one-all. I should also point out that the results had more to do with local than with national issues and that we will get the seat back in May with no problem.
The police authority may also suffer from capping. Today I received a letter from the chairman of West Yorkshire police authority, who is writing to all West Yorkshire Members to seek our support in asking the Government to reconsider proposals which it says will severely jeopardise the financing of the police service in the county in 1991–92. The chairman writes:
The Director of Finance reported that the Authority would have to reduce its budget by £8m (gross) in order to avoid the Dept of Environment's present 'capping' proposals. This reduction is equivalent to a 4 per cent. cutback. As you may well be aware, over 80 per cent. of the Authority's expenditure is on pay and related expenditure. Therefore, any cutback of this magnitude will affect the number of Police Officers and civilians that can be appointed. Initial indications are that, even if Police and civilian recruitment is stopped completely, it will only go half way to meeting the necessary reduction. This could mean that by March 1992 there will be 350 less Police Officers on the streets of West Yorkshire and about 200 less civilians supporting them. This would have to be coupled with no new vehicles, and a complete stop on all repairs to buildings.
I shudder to think what will happen in West Yorkshire if those cuts go ahead. We have suffered increases in crime generally and in the number of burglaries. People are desperate to see more police men on the streets and to have their communities better policed. We shall not get that if the local police authority budget is cut.

Mr. Key: It is a pleasure to be getting on with the hon. Lady so well. No one can say that I do not listen to authorities around the country. When I saw the hon. Lady's local police authority last week, I pointed out a difficulty to it. Although it said that it wanted more civilianization—that is entirely in line with what the Home Office wants—in the next breath it said that, in the establishment indicators used to determine the SSA, no account is taken of the level of civilianisation. I fear that the reply to that is that the local authority associations, which are controlled by the Labour party, cannot agree on whether those indicators should include civilianisation. So far, they have said that they think that they should not. They cannot have it both ways.

Mrs. Mahon: I seem to have touched a raw nerve—first on the subject of the fire authority and now on the subject of the police authority. The letter clearly states—the


Minister is being warned—that there could be 350 fewer police officers on the beat if capping goes ahead. I view that with very serious concern, and I hope that the Minister will, too.
As I said, last year Calderdale was poll tax-capped—very unfairly, in my opinion. Tories on Calderdale council now claim that cuts in services are the responsibility of the Labour group, which has only had total control for just over 12 months. That is absolute rubbish. It is a deliberate attempt to deceive the electorate and I believe that the Tories will get their come-uppance in May.
The hon. Member for Nottingham, South (Mr. Brandon-Bravo) touched on the services that councils are expected to provide. The Government have placed added burdens on councils but have not given them sufficient money to cope. The Government have been taking money away from councils since 1979. If Calderdale council now received the same rate support grant as it enjoyed in 1979, we would be £42 million better off.
We have had nothing but cuts, cuts, cuts. Responsibility for the provision of services has been piled on to councils under the Government's legislation, including the care in the community provisions, the Children Act 1989, the local management of schools provisions, the reduction in housing benefit subsidy, the Food Safety Act 1990 and the proposed increases in respect of probation reports. Added together, the costs of those provisions to Calderdale alone this year are £2 million.
As I said earlier, to satisfy provisional capping rules, Calderdale needs to reduce its standstill budget by approximately £9 million. Even if we used all our balances, the effects on services would be devastating. The council has struggled bravely to ensure that capping has not hurt the most vulnerable in the community and to try to make cuts where they will do the least damage. Given that fact, this treatment by central Government of local government is disgraceful.
The Bill is not necessary. The Minister knows that the new Secretary of State is going to abolish poll tax. There is no other way of proceeding. The poll tax is a gaping black hole. One can pour money into it and throw money at it but one will never make it fair and one will never achieve adequate collection levels. It is a disgraceful policy. It has brought down one Prime Minister and I predict that, if the Government do not get rid of it, it will bring down another.

Mrs. Edwina Currie: I support the Government on the Bills before us. I am particularly pleased to see the righting of the anomaly on caravans, and the sorting out of Lambeth will be especially useful.
As has already been said, my local authority—Derbyshire county council—is a collection of unreformed spendthrifts, known locally as "the idiots in Matlock". As I am sure the House will be aware, old-fashioned, stupid, arrogant socialism is alive and well in this country, and residing—indeed, rampant—up in Derbyshire, and it is a very great pity.
A number of examples have been given of what that authority has done. I merely offer a new one: the adult literacy team funded by Derbyshire county council decided to hold a day conference on—would you believe it, Mr. Deputy Speaker—Nicaragua. It was free, and it was paid

for by the county. The team is entitled to hold a day conference on Nicaragua, but I suggest that those who attend should pay for it themselves and that the council should not use our rate fund money in that way.

Mrs. Mahon: Will the hon. Lady give way?

Mrs. Currie: I should be delighted.

Mrs. Mahon: I imagine that the reason why the team decided to hold an adult literacy conference on Nicaragua is that the experience of that country, and its adult literacy campaign following the revolution in 1979, has been praised by every literacy organisation in the world.

Mr. Deputy Speaker: Order. Nicaragua is a long way from the contents of the Bill.

Mrs. Currie: Absolutely, Mr. Deputy Speaker. They held the conference because they are a bunch of left-wing idiots. That was the only reason.
Derbyshire county council is the largest authority to have been capped recently and the first ever county authority to have been capped. Its budget was cut from £560 million to £520 million and fortunately that resulted fairly quickly in a sharp reduction in the charge—down by £56 from £458 in Derby, which had the 10th highest charge in the country. That produced a sigh of relief in my constituency.
The county budget was reduced by rather more than that. It was reduced not by the£40 million that the capping legislation required but by £45 million. That rather suggests that all the noise made in Derbyshire, both before and since capping, about the effects that it would have was all a load of hogwash. If the authority could cut the budget by even more than was required, why did it not go for that budget level in the first place? There was no guarantee under the previous legislation that the link between the budget and the charge would be made and that is why today's legislation is particularly useful. The uncertainty and fear that was generated when we first realised that the charge might stay the same, was unacceptable.
I am also pleased that the uncertainty has been reduced for 1991–92. We now know that next year's budget must be less than 7 per cent. higher than this year's budget or the county will again be capped. Therefore, we know that the maximum will be about £555 million.

Mr. John Battle: The hon. Lady just said that we now know the arrangements for the 1991–92 budget. Is that a firm commitment that there will be no review of the poll tax or any change to it before the end of March 1992? Does the hon. Lady not anticipate any change to the basic legislation to which the Bill is attached?

Mrs. Currie: I was merely making the point that the county authority has a habit of spending as much as it can possibly get away with. This year, it got it wrong and it spent too much. The county was capped and there were major court cases, but the Government won. The maximum amount that Derbyshire county council will be able to spend next year, without being capped, is 6·9 per cent. extra. That brings at least some certainty into our lives. I share the view of the hon. Member for Leeds, West (Mr. Battle) and I hope that Derbyshire county council spends rather less next year. That is possible and it would be beneficial to the charge payers who have to foot the bill.
The community charge system was recently reviewed, and the Bill is part of the response. I backed the whole


set-up, the basic principle that everyone uses local services and everyone should pay for them and those who cannot pay should have a rebate system. That is sensible.
However, the trouble is that in my county and my constituency, many people believe that there are difficulties and those difficulties show up sharply in the case of Lambeth. If there is to be a personal cost, that is not a charge; it is a tax. A charge is something someone pays for a service that he wants, such as meals on wheels. A tax is something that someone pays because he has no choice. If there is to be a tax, people expect it to be progressive and not regressive. The rebate system is no alternative to that.
The process has also turned out to be opaque, and rate capping in Derbyshire, and I am sure in Lambeth, has had some rather anomalous effects. Charge capping has led to a loss of rebate, which in turn has meant that in the autumn of 1990, some of my constituents are required to pay to the local authority more then they did at the beginning of 1990 when the charge was higher and they received a rebate. There is no way in which we can say that that is fair. If my colleagues on the Government Front Bench are looking for anomalies to correct, I suggest that they put that one right as well.
I was a councillor in the great city of Birmingham for 11 years. Local government was established in Birmingham more than a century ago when the great Joseph Chamberlain walked the streets there. We should cherish the vital role in the provision of services and the maintenance of standards that local government can provide. I am sure that my right hon. Friend the new Secretary of State for the Environment shares that view. It is significant that the new Prime Minister was a Lambeth councillor and virtually the first Bill to come before this new Administration is intended to sort Lambeth out—and about time too.
Some principles emerge from the relatively minor changes to anomalies that we are debating under the Bill. We cannot simply return to the rating system. We cannot simply scrap the set-up and return to the rates. A number of points that have been incorporated in legislation are now widely accepted. Most people believe that local government should continue to be supported by locally raised funds, that the local authority should have a tax-raising power and take responsibility. That is the point of standing as a councillor. We must ensure that the local authority has an incentive to improve its area. The trouble with the uniform business rate as it stands is that there is no incentive. A county can simply neglect its land, because that will make no difference to how much money comes in.

Mr. Harry Barnes: The hon. Lady said that those principles emerge from the Bill that we are debating today. How can that be? The Bill ploughs on with the poll tax as it was. It might be redundant by Wednesday and it might be withdrawn. We might have something else to discuss, and that might be the position that the hon. Lady supported during the election for the Conservative party leadership.

Mrs. Currie: If the hon. Member for Derbyshire, North-East (Mr. Barnes), who is my colleague from Derbyshire, would just sit still and pin his ears back, I shall give him a little lesson on the link between the Bill and the

principles that I am trying to enunciate. It would make a change for the hon. Gentleman to sit and listen—he might learn something.
It should be possible for a local authority such as Lambeth or Derbyshire to be encouraged to develop its land. Under the old rates system that was at least a possibility and a council was encouraged to get rid of derelict land and to develop it for housing or industry because that would widen the rate base. As a result, in Birmingham in 1982 we widened the rate base by selling off surplus properties and land and we reduced the charge to our ratepayers the following year by 12·5 per cent. even though our budgets were increased. That is the golden scenario that we should build into legislation.
Another principle lies at the heart of the Bill. The tax, charge or whatever we call it should bear some relationship to a local authority's overall spending. If Lambeth chooses to spend a king's ransom or if Derbyshire chooses to spend like there is no tomorrow, that must be reflected somehow in the charge paid by the people who live in the neighbourhood.
Of course there must be an equalisation process. Many local authorities do not have the population or, under the rating system, do not have the rate base to generate enough money for their needs. Wealthy authorities do not need so much and poor authorities—we have heard several examples—have considerable needs. As a principle, the legislation states that the tax should bear some relationship to the authority's overall spending and that means that accountability works through the ballot box sooner or later.
There is also an argument, which I broadly accept, that the tax should have some relationship to relative wealth. That is when we argue about how we measure wealth and whether that is related to the amount of capital someone possesses, to the capital value of a property, and whether it should be related to a roof tax, a floor tax or any of the dozen different alternatives put forward by the Labour party over the past two years.
If the system was based on the capital values of properties and not on the present system, Lambeth's income would be decreased. Property values in Lambeth are perhaps 20 per cent. lower than they were two years ago. If the council's income had been linked to capital values, the amount of income that it would have had to play with would have decreased. That is the opposite of what we want. During a recession or a time of falling capital values, as I am sure the hon. Member for Sheffield, Brightside (Mr. Blunkett) would agree as we were both councillors in big cities at the same time, or when things are not going well in the economy, that is precisely the time when local authority services are under most pressure and there is often most need. That is not the time when there should be a drop in a local authority's income.
The Bill is part of a rather crude mechanism for using some national Government power to control what local authorities are getting up to. We have ended up with a dozen different systems, none of which seems to be working terribly well. My plea today is that, along with Lambeth and Derbyshire, perhaps current thinking should consider ways in which local government and central Goverment interact.
At the moment, we have the control system of the ballot box, which is great and I agree with it. However, we cannot get our council out in Derbyshire until 1993. We elected it


in 1989 under the old rates system. We brought the new system in, in 1990, and we are stuck with the council until 1993. That is not very satisfactory.

Mr. Eric Illsley: When the hon. Lady reads her speech tomorrow, she will note that everything that she has said has been a complete denial of the principles of the community charge. She is talking about ability to pay, accountability, and a local authority being able to raise its own revenue. They are exactly the arguments that were put by Opposition Members during the passage of the legislation.
It is incredible that the hon. Lady is now putting forward those arguments. How can she say that the ballot box will bring about accountability when she agrees with charge capping? The two cannot go hand in hand. The Government either allow accountability to take its course and the ballot box to provide a local authority that the electorate want, or they charge-cap. They cannot have both.

Mrs. Currie: We have both, and it is a jolly good thing that we in Derbyshire have both. Most of the time most local authorities are prudent and sensible. Most local authorities in this country have tried to behave with a degree of prudence. A small number do not, and do not quite deliberately.
I do not regard Derbyshire county council as composed of fools; I regard it as composed of knaves. They know what they are doing and they do it with great panache and glee. The result is that many of my constituents have to pay far more than they would otherwise have to pay.
We have the ballot box system and we have capping, which is a blunt instrument but it is effective and I hope that any future system continues to have it just as we had it before we had the community charge. We have inspectorates—they are coming out of our ears—for schools, local authorities, social services, old people's homes and so on. My worry is that many of the inspectorates that maintain standards, particularly in respect of child care services, often report too late and when there has been a terrible disaster or tragedy. Somehow we need to make that part of their work better.
We also have the district auditor who is an essential part of the entire system. The district auditor in Derbyshire is currently working on several reports about ultra vires expenditure and inappropriate claims by various Labour county councillors. Several reports are floating around and nobody has seen them yet. I hope that my hon. Friend the Minister will find out what has happened to those various reports by the Derbyshire district auditor and ensure that they are published and that appropriate action, which might include the disqualification of the councillors concerned, is taken as quickly as possible.
We also have other systems, but the whole set-up of control at the moment is complicated and muddled. Sometimes as a result, it is ineffective. If it worked, we would not have a Derbyshire budget of more than £0·5 billion a year. We have very little deprivation—we must be straightforward about it—in Derbyshire. We have relatively low unemployment rates, and they are still falling. We have massive inward investment from all over the world into highly successful businesses. We simply have very few problems in our bright and beautiful county,

and we do not need to spend half a billion quid a year providing services, administration and conferences that are not needed.

Mr. Harry Barnes: Why is there so much concern in Derbyshire about the results of poll tax capping in connection with the disabled? The Derbyshire Coalition for Disabled People has had its budget cut considerably, as has the Ripley Centre for Integrated Living. There was a great shout and concern about that. I blame the Government's rate-capping policy for it, while others blame the county council. It is a matter of great concern, which shows that there are disablement problems in the county that need to be dealt with and many other social problems, especially in working-class rather than middle-class areas of Derbyshire.

Mrs. Currie: I represent one of the best working-class areas in Derbyshire and I am very proud of the local people who sent me here. The hon. Gentleman knows perfectly well why the disabled have lost their grants. It was because his crass, horrible and cruel friends in Derbyshire cut their grants. That was the first thing they did. The county authority has taken on 8,000 additional staff since 1981 and is still charging local families exactly the same price for school meals as it charged in 1981. We now have 10 years—[Interruption.] Admittedly we would all regard it as a great success if the Government managed to charge the same prices as they did 10 years ago, but we have not yet reached that stage.
That is why the hon. Gentleman and his friends are wrong. They tried to cut the grant to Age Concern and there was such an outcry that it had to be restored. They are measured by their own actions. If the first thing they did was to cut their publicity department and reduce the number of education advisers, which had been severely criticised by the inspectors, I would say, "Good, they are doing the right thing." When the first thing they did was to cut the budget for disabled people, by their deeds shall ye know them.

Mr. Nellist: Is not it a fact that directors who are earning £70,000 a year are paying far less tax than they were 10 or 11 years ago, to the tune of more than £1,000a week? Is not the only difference that Labour authorities,which freeze the cost of school meals or bus fares, are looking after our folk, and that the hon. Lady's Government, with tax cuts for the rich, are looking after her folk? The principle is exactly the same, only we do it for far more people.

Mrs. Currie: Some of the most highly paid people who live in Derbyshire are senior employees of the county authority. They include people such as the current director of education who, two years ago, was a councillor of the same authority. If that is not jobs for the boys and people who are benefiting from income tax cuts, I do not know what is. The previous chief executive, who was appointed a couple of years ago, was a former Member of this House.

Mr. Haynes: Say it outside.

Mrs. Currie: I shall say it in the House, and the hon. Member for Ashfield (Mr. Haynes) will listen. He does not like it, does he? The previous chief executive was a former Member of this House. He lasted just nine months. He was One of the highest-paid people. He paid a lot of tax on his salary, and no doubt he has paid a lot of tax on what they


have paid him off with. My constituents will be much happier with fewer senior officers in Derbyshire and with fewer people spending their money as though there were no tomorrow.

Mr. Nellist: That is probably one thing on which the hon. Lady and I would agree. I do not like Labour authorities employing people on five or 10 times the wages that local people get. There is an old saying in what is known as the good book about taking a beam out of one's own eye before taking a mote out of anybody else's. The hon. Lady is talking about somebody who was once an elected Member moving on to a paid job. We have 250 Tory Members with two, three, four or five jobs. A previous hon. Member for Hexham, Geoffrey Rippon, as he then was, was a Member of Parliament, a QC and either the chairman or director of 55 companies. I have never been able to work out how he ever found time to come in and pick up his parliamentary pocket money.

Mrs. Currie: The hon. Gentleman forgets that many of my colleagues are able to take on this sort of job because people want them and their talents. The question that I put to the hon. Gentleman about Labour jobs for the boys in country authorities such as mine is quite simple. Would individuals like that get the job at all if they were not the political playmates of the councillors who appoint them? That is the trouble.

Mr. Deputy Speaker: Perhaps now we may get back to the Bill.

Mrs. Currie: I am most grateful for your indulgence, Mr. Deputy Speaker. As you realise, there are issues in Derbyshire that are yet to be resolved. Among them are what the budget is and should be and what level of services should be required. I am therefore glad to support these modest changes in the law, but I hope that we shall see a much more thorough reform in the near future.

Mr. Andrew F. Bennett: The performance by the hon. Member for Derbyshire, South (Mrs. Currie) must be one of the best examples of a schizophrenic speech that hon. Members have heard for a long time. I gather that the main thrust of her argument was that she trusted local democracy, but not in Derbyshire, and that the local electorate is not capable of exercising its judgment in Derbyshire, but that electors in the rest of the country are capable of doing that.
My experience of what goes on in Derbyshire is based on living in the Greater Manchester area and visiting people in Buxton, Glossop and the area on the edge of the Peak district. I have seen those areas. There is considerable deprivation. I noticed that the majority of people there are delighted with the progress that Derbyshire county council has made in the provision of services since 1981 when the Labour party took back control of the county council.
The 1981, 1985 and 1989 results suggest that people are pleased with the services that are provided in Derbyshire. The next time the hon. Member for Derbyshire, South is persuaded by the Whips to make a speech, I suggest that she thinks a little more carefully before she starts. I realise that she wants to ingratiate herself and to get back in favour, but I suspect that the fact that the Whips will have

put down a mark because she spoke for 20 minutes will not do her as much damage as if those from whom she is seeking promotion actually read what she has said.
As far as I am concerned, this whole debate has been a waste of time. On some occasions, Mr. Deputy Speaker, you and I have seen the House waste a lot of time, and this is a very good example of that. I do not believe that any hon. Member wants the Bill to be enacted. Opposition Members want a Bill that will abolish the community charge because of principle and because we believe that the poll tax has been a disaster for the country. Conservative Members want its abolition because of expediency. They know that, unless they get rid of the poll tax, they will go—

Mr. Illsley: Does my hon. Friend agree that the speech of the hon. Member for Derbyshire, South (Mrs. Currie) was a plea for the abolition of the poll tax because it called for accountability and for local government to raise its own revenue?

Mr. Bennett: I accept my hon. Friend's argument.
We must consider the Bill against the background that we want to get rid of the poll tax. The Bill means that, for another 12 months, my constituents and those of other hon. Members will have to suffer as a result of the poll tax. The Bill is also a total contradiction. It is all about capping, which means taking away any measure of local accountability and the choice of local electors to decide the level of their community charge.
As I understood it, the whole philosophy behind the community charge was, first, that it would simplify local government; and, secondly, that local government is currently spending too much money and that by creating some local hardship local authorities would be encouraged to reduce their charges. The downside, according to the Government, was that more people would pay, and that there would be some problems with collection.
However, all that we have had as a result of the poll tax have been disadvantages. The Government cannot claim that there have been any advantages from it. Let us consider whether the poll tax is more simple than the previous system of local government finance. I cannot find anything about the poll tax to suggest that it is. It is no easier for my constituents to understand whether they are getting a good or a bad deal from local government under the poll tax than under any of the previous systems.
If anyone can explain how any of my constituents can look at the standard spending assessment and see whether their local authority has been treated fairly, I should be interested to hear from him. It beats me. Even the experts cannot see anything fair about it. It is simply a matter of expediency. We all hope that the money is worked out correctly, but on the whole we know that Conservative-controlled authorities have done well out of the SSAs and that Labour-controlled, Alliance and hung councils have done badly. That is the only consistency that I can see.
I turn to the proposition that if hardship is created local authorities will spend less. All the evidence from my constituency and from many other parts of the country shows that local authorities are underspending. They are not meeting the clear needs of the people in their local communities. We should be looking for ways to increase local authorities' ability to meet the needs of local people.
Now let me deal with the disadvantages. Some people are not paying because of principle, but many are not


paying because they cannot afford to do so. I believe that we are creating a new culture among our young people of how to avoid paying the poll tax. I have spoken to a number of young people who do not want not to pay on principle but who are not keen to pay because of financial difficulties. They are reluctant to register anywhere for the poll tax. My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) has highlighted evidence of a decline in the number on the electoral roll. I want the Government to take this Bill away and to replace it with a Bill to scrap the poll tax.
I should like to outline briefly the impact that the poll tax has had on my constituency. I am in the delicate position of representing two local authorities, Tameside and Stockport. Although in many ways the two authorities are similar, there are also considerable contrasts between them. However, both feel under considerable pressure because they might be capped. Tameside has been a Labour-controlled authority since 1983. On the whole, it is an efficient local authority which has striven hard in the past few years to improve its efficiency. However, instead of considering how to provide better services, for most of the last year or two it has tried to see how it can get round the standard spending assessment because it is unfair to Tameside, and how it can make cuts that will cause the least possible damage. Tameside has not had the resources that could have enabled it to achieve greater efficiency.
Our major problem in the Denton part of my constituency is traffic congestion. Many people now have motor cars, but many streets were not designed for them or for parking. We therefore have parking problems and an increasing problem with rat running. The local authority needs the time and resources to establish proper traffic management schemes. Such schemes would be expensive, but could well save lives. Many youngsters in my constituency are now at risk because of the volume of traffic.
Tameside has an increasing number of elderly people. Time after time constituents ask for a simple adaptation, such as a handrail, or help in getting up the stairs—not necessarily a stair lift, often only an extra rail. However, the local authority is having to say to people, "We are sorry, but we cannot provide that," or "We cannot provide it for some time." That is a major problem because it reduces the quality of life for those elderly people now and makes it more likely that they will need expensive care in the future—

Mr. Deputy Speaker: Order. All this is a long way from the content of the Bill.

Mr. Bennett: I understand that, Mr. Deputy Speaker, but the whole thrust of the Bill is to frighten authorities such as Tameside into cutting their expenditure as a result of the capping mechanism. That is why I am arguing that authorities such as Tameside should be encouraged to increase their expenditure in social services areas rather than being pressurised and worried about how much they should spend, with the result that elderly people do not get the help and adaptations that they need.
Tameside also faces child abuse problems. There have been tremendous scare stories in the newspapers about spending money on that problem. On the one hand, the authority is told not to put children at risk, and on the

other it is told, "Don't spend money, because you may be capped and, if you are capped, you are likely to be under greater pressure."
The same applies to the problem of young people with learning difficulties. Several young people with learning difficulties have been cared for by their parents in their homes, but now need a community home to be provided by the local authority. Again, there is pressure and the local authority is reluctant to find the money simply because of the capping pressures.
I could go on to refer to education, but Tameside is also under pressure because of new Government legislation. The Environmental Protection Act 1990, of which I greatly approve, requires Tameside to pick up more litter, especially in areas such as the centre of Denton. All that costs money, and the council is caught between the pressure of being capped, the demand to provide services for local people, and the costs of those services. I have every sympathy for the hard-worked councillors of Tameside who are trying to find their way between the conflicting pressures—the capping pressures coming from the Government, the hardship that they know is being created for people because of having to pay the poll tax, and the obvious need for services.
Exactly the same picture applies to Stockport, but Stockport is not Labour-controlled. From 1974 it was controlled by the Conservatives, but they lost control in the 1980s and it is now a hung council. Stockport has traditionally been a low spender. It is one of the worst spenders on education in the country, and is not at all profligate. However, it is under pressure from the Government and is absolutely scared stiff that it will be capped this year. The authority needs extra money for social services, provision in the community and facilities for people with learning difficulties, but is having to see where it can make cuts, which will result in hardship.
During the past few years money should have been spent on old people's homes in Stockport so that their residents could have been given single rooms rather than communal sleeping areas, but there has been no money. The same problems apply to education and refuse collection. When I was elected in 1974, a substantial number of people employed in the parks department in Stockport had learning difficulties. The authorities regarded it as a service to employ those people to do something worth while.
Gradually, with all the pressures on local authorities to become efficient, those people were squeezed out of employment through such means as productivity schemes. Some of them still live in Stockport but have been unemployed for long periods and are unlikely to get a job. The Government pay almost the same amount in benefit as those people used to earn, but when they worked they felt that they were making a contribution to the community. Now, with all the pressure for local authority efficiency, they have lost their jobs, and they feel disillusioned and unwanted by society, and the parks are no better looked after.
The Strangeways riots this spring had nothing to do with local government in Greater Manchester, but now the police authority is faced with a large bill for the overtime that had to be worked by policemen looking after prisoners in police cells. Local authorities had no control over that, but unless the Government come up with extra


money to meet those extra costs, they will affect the precept that the police authority has to impose on all the local authorities in Greater Manchester.

Mr. Redmond: My hon. Friend makes an interesting point. It is wrong that a local authority should have to pick up a bill created by a Government seeking to maintain overcrowded, disgusting prisons. Has the standard spending assessment formula taken into consideration such ad hoc expenditure? When the Minister comes to the Dispatch Box, will he say whether he intends to reimburse the local authority for that extra expenditure this financial year or next financial year?

Mr. Bennett: As I understand it, Manchester police authority has not been given any sign that the money will be reimbursed. The local authorities are trying to arrive at a poll tax for next year under the threat that that money will not be given back and are having to consider making further cuts.
I am worried that the continual pressure on local authorities such as Tameside and Stockport will make them consider further cuts. The local authority in Stockport has been under such pressure that it considered stopping the rising-fives going to school. That would make a small saving, but would handicap all those youngsters for the rest of their lives because we all know the advantage of starting full-time education as early as possible. That proposal seemed absolutely crazy and I think that Stockport has had the sense to dismiss it. That example shows the pressures that local authorities are under to avoid the capping process.
The Government should take away the Bill, forget about it and come back with a simple measure to abolish the poll tax, or community charge, and go back to the old rates. There is no need for a review. There is nothing complicated about it: most local authorities could return to the rating system next April. I am sure that all local authorities would be pleased to do that; my constituents would certainly be delighted by it.

Mr. Dudley Fishburn: It is a great pleasure to follow the hon. Member for Denton and Reddish (Mr. Bennett), because he correctly said that his own speech was a waste of time, so I know that he will be charitable with mine.
Capping is a necessity because of excess expenditure, not inadequacy of income. Capping is a reflection on the need to control the outgoings, not an attempt to ration the amount of money that comes in. Therefore, capping is necessary, regardless of whether we have a system of poll tax, rates or, as I hope, in future, a more acceptable system. There will still be a need to control, not those who wish to spend merely over the odds—clearly there is flexibility within any system for one borough to increase its revenue—but those who seek to spend excessively and without any restraint of public consideration.
I shall relate a tale of two boroughs, one of which lies at the heart of the Bill—the borough of Lambeth—and my own borough, the royal borough of Kensington and Chelsea, which marches alongside the borough of Lambeth, separated only by the River Thames. Those two boroughs have many factors in common in relation to

their expenditure needs. They both have the problems and advantages of being in the cosmopolitan heart of our great capital city. We share many of the huge costs that go with living in the heart of an inner city. There are large numbers of disadvantaged and poor people, many ethnic minorities and, in my constituency and Lambeth, a large West Indian community which, in Notting Hill and beyond, because it has been there so long, is now, I am grateful to say, an entirely English community. My constituency contains the biggest Moroccan community in this country. We are faced with high expenditure for new groups of people in the country and for the disadvantaged.
The two boroughs, which march side by side, share another problem—a tremendously high turnover of people every year, which makes the poll tax so hard to collect. The London electricity board, which has to change the meter every time someone moves flat or house, changes 25 per cent. of the meters in my borough every year. This movement of people adds to our expenditure.
Another similarity between the two boroughs which may interest the House is that we compete over which of us houses the largest number of Members of Parliament. My old friend the late Ian Gow used to leave the House to go off to the people's republic of Lambeth every night. An equally venerable, but somewhat more prosperous, Member of Parliament lives in the heart of my constituency in one of the houses that would have been charged the highest property tax, but for which he now pays a relatively small community charge—or rather, refuses to pay: the right hon. Member for Chesterfield (Mr. Benn). He lives in one of those grand houses where, when Members of Parliament call, they are requested to go round to the tradesmen's entrance.
I remember calling at a house only a few yards down from the home of the right hon. Member for Chesterfield, where I was met by the butler. When I asked how the house would be voting, the butler pulled himself up to his full height and said, "Madam is somewhat disillusioned with the Conservatives, but you have got my vote, Guy." That shows the mixture of people we have in the heart of London.
Another similarity between north Kensington and Lambeth is that both constituencies have a large Labour population, both of which respond to the efficiency of expenditure of their respective boroughs. There is a difference which explains why one borough is being capped and why the other, with similar problems, is a model of efficiency. It is that the royal borough of Kensington and Chelsea has the lowest number of employees per 1,000 constituents, while Lambeth employs one of the largest and hence most expensive work forces.
The salaries of those employees have to be met by the people living in the borough, which is why Lambeth is faced with such high expenditure and thus with poll tax capping. My borough has one of the best records of maintaining council house stock and one of the largest housing association stocks—

Mr. Deputy Speaker: Order. I am not sure that extolling the virtues of Kensington and Chelsea has a great deal to do with the purposes of this Bill.

Mr. Fishburn: I realise, Mr. Deputy Speaker, that I was straying—you were kind to let me stray so far.
The point is that expenditure lies at the heart of capping. If councils spend the money they raise through


revenue efficiently, there is no need for them to be capped. They can use their money to improve services and work for decent living conditions in their neck of the woods. Councils can achieve far more if they control public expenditure rigorously than if they let it rip. Letting it rip invites capping.
My borough and I have been against the poll ta K since its inception. The legislation putting in place the community charge was given its Second Reading before I became an MP.
Expenditure must be watched carefully throughout the life of an annual budget. Capping an authority is not the rational answer to a rational local authority; it is, however, the rational answer to an irrational expenditure plan. Capping is therefore needed for those boroughs—they are overwhelmingly run by the Labour party—which do not control their expenditure rationally. I am delighted to say that it will not be required in my borough.

Mr. Martin Redmond: Quite a few Labour Members still want to speak, so I shall try to be brief.
This Bill, like the rest of the poll tax legislation and the rest of Government legislation since 1979, stinks. It does not show an ounce of compassion, or of tolerance for or understanding of the needs of local people. Doncaster was capped last year, and under this Bill it may be capped again in future. I am extremely pleased to say that we have a caring, compassionate council in Doncaster. It is concerned about the quality of life that the people of Doncaster have come to expect from a highly efficient Labour-controlled council.
The council has already endeavoured to give value for money—that is its motto. Doncaster has services of which we can be justifiably proud. But that is not good enough; we want to improve those services, because it is impossible to stand still.
The people of Doncaster have come to expect much more than the reduced quality of life that the Government offer with this Bill. The Minister said that Doncaster would receive a 9 per cent. increase in its SSA calculation. We need to know what that figure refers to: the figure that was capped or the figure that the Minister decided Doncaster should spend? If it is 9 per cent. on the Minister's decision, Doncaster's spending power will be severely limited next year.
The Minister said that the High Court and the Lords had backed the Government's right to poll tax-cap local authorities. The Government may well have won the legal argument, but they have certainly not won the moral argument—they would have been left out of court if the moral argument counted.
When the poll tax was introduced, the Government made great play with how it would make local authorities accountable to the people who paid it. I regret to say that that has not happened. The public have seen through the charade and are making the Government accountable for the poll tax. That is one of the reasons why the Conservatives' beloved leader was stabbed in the back and given the boot. The policy helped to bring about the downfall of the Prime Minister. Many Tory Members have supported the poll tax throughout, despite the many terrible ways in which it attempts to destroy the quality of life that we have come to expect in Doncaster.
Doncaster is an authority that has suffered a great deal of unemployment because of the rundown of heavy industry, which gave work to thousands of men and women for many years. Government policy caused that rundown, so Doncaster needs to spend money to find alternative jobs, to attract business and to clear up the results of generations of neglect of the environment while heavy industry provided jobs in my area and south Yorkshire.
Every time Ministers visit Doncaster metropolitan borough council, they come away pleased with the highly efficient way in which local councillors operate—full of praise for their achievements in the face of difficult tasks. The point is that "you get nowt for nowt". To bring about the sort of improvements that we seek for the people whom we represent, we need to spend a few bob—but the Government do not want the local authority to spend a few bob.
I am a great believer in education. We must ensure that our youngsters have an education to take them into the 21st century. Education is the single largest expense for local government—Doncaster spends about 67 per cent. of its budget on it—so education is the first to suffer. We have a great many nursery places because our people wanted them, but it would appear that the Government are not interested in that. They are tinkering with the poll tax, when the Secretary of State for the Environment should come to the House and withdraw this Bill—and the rest of the poll tax legislation with it. He will not come, and that is a great tragedy.
I suppose that we should be pleased, because, as long as the poll tax hangs round the Government's neck, more and more Labour Members will be elected to this Chamber. I do not want it that way, because, while the poll tax is in operation, it will bring pain, suffering and misery to many of my constituents.
The Government talk about winners and losers. There are not many gainers, but the vast majority of them in Doncaster do not want the damned poll tax anyway, because they recognise the injustice of the system. The people in the ivory tower of Whitehall do not appear to be able to see the pain and suffering that is endured by ordinary people. That is a great tragedy.
The Minister is relatively new in his Department. He should seriously consider saying to his boss, "There is only one cure and only one commitment that will satisfy the House and the people. We must get shot of the poll tax. Let us have a sensible system that the vast majority of our people want."

Mr. Robert G. Hughes: The hon. Member for Don Valley (Mr. Redmond) used words with which we are all familiar when he suggested that Labour would win the next election. He spoke with less gusto than usual, and although Opposition Members always mention the opinion polls, he did not. Could it be because he is one of many Labour Members who are plotting in corners against their leader trying to destablise him? He should desist from that because we are happy with the leader of the Labour party. His hon. Friends should leave him alone and let him get on with the job.

Mr. Redmond: The hon. Gentleman has not been listening. The leader of the Labour party is firmly committed to abolishing the poll tax. Unlike Conservative


Members we do not need to stab our leader in order to get our party elected. My right hon. Friend the Member for Islwyn (Mr. Kinnock) will lead us to victory at the next election. Many Conservative Members will not be there to see that happen.

Mr. Hughes: Such a warm endorsement should worry the Labour leader.
There are firm arguments for and against community charge capping. People with authoritative knowledge reasonable argue that capping councils is undemocratic. They say that we now have a system by which people can see how much a council spends on their behalf. Many Conservative Members accept that principle but it has one fault. It is that, in the first few years of the community charge, Labour local authorities can blame huge spending increases on the Government. In spite of those spending increases and the fact that those councils have done nothing to bring expenditure under control or to get better value for money, they blame everything on the Government.
Such instructions went out to Labour councils from Walworth road, and the Labour party in London decided to try to make the community charge as high as possible in order to put as much blame as possible on the Government. They suffered for that in the local government elections. It is not surprising that Labour wants the community charge to go—not just the bad bits but the good bits as well.

Mr. Illsley: Where is the proof?

Mr. Hughes: Hon. Members should talk to some of the Labour local government leaders in London. They will admit that their strategy was to try to impose as high a charge as possible.

Mr. Illsley: Will the hon. Gentleman give way?

Mr. Hughes: The hon. Gentleman is not a London Member, but I shall give way to him.

Mr. Illsley: An authority in my constituency was poll tax-capped. We do not want to ask the leaders of the local authorities. We are asking the hon. Gentleman for the proof of his statement.

Mr. Hughes: I appreciate that the hon. Gentleman would not know much about London. There are precious few London Members in the Chamber. There is only one Opposition London Member, and perhaps he will intervene to suggest that I am wrong. I know, and the Opposition know, about the strategy adopted by the Labour party.

Mr. John Marshall: My hon. Friend is a community charge payer in the London borough of Ealing, with which I used to be associated. Does he remember that, in the 1980s, when Conservatives were in charge of Ealing and I was chairman of the finance committee, we were able to boast that we had the lowest rates in west London? When Labour won control for four short, expensive years in 1986, its first action was to remove that phrase from the council's literature, because it determined no longer to have the lowest rates in west

London. That is indicative of the high-cost, inefficient, doctrinaire policies that the Labour party followed in local government throughout London.

Mr. Hughes: My hon. Friend is right. Empirical evidence could be produced to show that I was more in favour of the community charge than any of my hon. Friends. If that were not the case, I would not have chosen to live in Ealing and to have a flat in Lambeth, because I am paying a higher community charge than anyone I know.
More evidence is available from Labour local government leaders. The leader of Camden council, Mr. Tony Dykes, said on 18 September 1987:
Since 1982 our staffing has increased by 2,000 people and we have regraded thousands of staff upwards since 1985. Yet no member of the Labour Group can pretend that services are 2,000 staff better or x per cent. growth better".

Mr. Battle: What was the date?

Mr. Hughes: I gave the date. The hon. Gentleman will have to read Hansard to find it out.
In the same year, the leader of Southwark council, Ms. Anne Matthews, who is well known for reading comics in her spare time, said:
The money spent in many areas is wasted.
Many people in Southwark will agree with that. She continued:
The services are demonstrably poor and give no reason why people in Southwark should trust the Labour party to run the council".
That was proved in the last local government elections when the Labour party fared disastrously in Southwark. It managed to hang on to control, but I do not think that in any London area Labour fared so badly.
A more recent piece of evidence is a document entitled "Labour Councils in the Cold" of January 1988, which was produced by the Labour party's co-ordinating committee. One passage reads:
When the local council wants to carry out a programme of service expansion, local people will no longer be cushioned by increased business rates and rate support grant. They will want to know that increased expenditure is well spent.
That is the crux of the argument.
The Bill is a modest measure that is designed to put into effect what we thought was the effect of the community charge legislation. Opposition Members oppose it strenuously because they know that their fox has been shot. They know that the money that is spent by councils and the value for money that is achieved by them are open for the public to see. They know that, whatever might be wrong with the community charge—it is clear that we shall review those things—there are two basic principles that are right.
They know that the public will see what is being spent on their behalf, and they know also that those who come within Labour-controlled councils will not like what they see. That is why they consider the Bill to be heinous. They know as well that the only people from whom increased expenditure can be raised are community charge payers. The people who are expected to elect Labour-controlled councils are those who will have to pay the bill. Naturally Labour Members do not like that. Labour party policy cannot live with open and honest debate about the party's policies.

Mr. Harry Barnes: Why do we need the Bill? What went wrong earlier? When a court decided in favour of Lambeth council, why was it discovered that, from the


Government's point of view, the Bill was defective? When we considered in Committee the Bill that introduced the poll tax, 47 civil servants were involved. We debated the poll tax until it came out of our ears. It seemed that nothing else was being discussed throughout the nation. Yet the Government could not get it right, and we are told now that this silly little Bill is necessary.

Mr. Hughes: I am sure that the House will be glad to know that the hon. Gentleman knows what is coming out of his ears. It is what comes out of his mouth that worries us.
Lambeth council introduced a community charge which it knew was not to fund good quality services. Indeed, it was not designed to do so. It knew also that the people of Lambeth could not afford it. The Government sought to reduce the bills that they faced and the Labour party fought and fought again through the courts to keep the bills as high as it could. The Labour party believes in high charges and low-quality services.

Mr. John Marshall: I thank my hon. Friend for giving way yet again.
One of the councils that could be affected by the Bill is Brent. Is my hon. Friend aware that in that Labour-controlled council rent arrears amount to 48 per cent. of the annual rent roll? Does he agree that, if it ran its affairs more efficiently and collected the backlog of rent, it could have a lower community charge and a better housing service?

Mr. Hughes: My hon. Friend has introduced an extremely important consideration. It has been central to the arguments of Opposition Members that the community charge is difficult to collect. I understand that that is so, because more people are paying it than those who paid rates previously. If the position is worse in that respect, it is only because some Labour-controlled councils have made no attempt to collect the charge. That is costing the people who live in Labour-controlled boroughs a great deal of money. It seems that the Labour party's policy is designed to damage services.

Mr. Terry Rooney: Name one such authority.

Mr. Hughes: It is my experience that anyone who wants to pay his community charge in Lambeth will find it extremely difficult to do so.

Mr. Rooney: On a point of order, Mr. Deputy Speaker. Is the Bill applicable only to London boroughs? Surely it affects the poll tax legislation generally and not only the London boroughs, to which the hon. Gentleman refers almost constantly.

Mr. Deputy Speaker: I have heard much today that has been out of order to some degree. I do not think that the speech of the hon. Member for Harrow, West (Mr. Hughes) is very different from what I heard earlier.

Mr. Hughes: That was uncharacteristically ungenerous of you, Mr. Deputy Speaker, but I take your point.
As the hon. Member for Bradford, North (Mr. Rooney) says, the Bill will affect the entire country, but I am entitled to speak about London; I am a London Member. Not all the worst councils are in London, but there are many pretty dreadful Labour-controlled councils to be found in the capital. If Labour Members want to say

that the councils in their constituencies outside London are as bad as some of the London councils, I shall be happy to hear them say that.
The Labour-controlled councils that I have been talking about do not want to collect the community charge. They do not want to have the money available to pay for services. They want merely to blame everything on the Government. There is plenty of evidence, from Labour councillors and leaders of Labour councils ensuring that they make their position clear to the public, that they do not mind whether or not they pay the community charge. That is why that argument is important, and that is why the Government must have the power, where necessary, to tell such irresponsible councils what amount of money is involved.
I wish to cite one more quotation, which is about the London borough of Islington—hardly a star in the Labour firmament, but one that should be remembered by the Labour party and the country. It is taken from a Queen's counsel's report on Islington, not in 1987 or 1988, but in October of this year. It states:
Having the cash office staffed by the innumerate, the filing done by the dyslexic and disorganised, and reception by the surly or charmless seems to us a recipe for administrative chaos.
That could apply to many Labour councils, both in or out of London. They do not care about the people in their areas. They do not care how much money they take from them. All they care about is staffing and spending money on their pet projects.
The Bill is designed to protect people, and it will protect people. Whatever the Labour party might say, we are determined that the people of this country will be protected against the Labour party.

Mr. Eric Illsley: The speech of the hon. Member for Harrow, West (Mr. Hughes) was one of the worst that I have ever heard. He does not realise what he is saying. He does his Government a great disservice by saying that they cannot control Labour councils which, he claims, have not collected any poll tax this year. It is an incredible statement. If it is true, the Government need to sort out the Department of the Environment because, obviously, it is at fault. The least said about the hon. Gentleman's contribution the better.
I wish to discuss the whole concept of poll tax capping and the basis for it. Every time, the basis of charge capping comes down to the standard spending assessment. On numerous occasions I have tried to explain to the Government that the basis for and the calculation of SSA are wrong and give rise to anomalous results. Barnsley has an increase of 19 per cent. on the SSA. It is higher than the average increase for the metropolitan district areas, but lower than the national average. Once again, Barnsley ranks 36 out of the 36 metropolitan districts for SSA per adult. It is at the bottom of the league table, as it was last year. There will be charge capping again because of the Government's restriction on the SSA.
I wish to make a simple comparison between Barnsley and the SSAs for other authorities. In 1990–91, Barnsley's SSA was 58·7 per cent. of Manchester's. For 1991–92, that proportion has been reduced to 56 per cent. There is a decreasing gap compared with West Sussex. West Sussex had 91 per cent. of Barnsley's SSA in 1990–91, but the proportion has now risen to 94 per cent. For the


forthcoming year, on a flat rate per adult of revenue support grant, there will be a decrease of £6·4 million on 1990–91. The grant has been reduced by £21 per adult. Barnsley will also lose the safety net and the area protection grant, which amounts to a vast sum of money.
A summary of central funding shows that revenue support grant has decreased by 12·4 per cent.; contributions from the safety net pool and the special low rateable value grant have decreased by 16·4 per cent.; and non-domestic rates have decreased by 19 per cent., giving a net decrease of 2 per cent. That compares with inflation of 10 per cent. If one assumes no significant downturn in inflation the following year, that will produce a decrease in real terms of £8 million, or £48 per adult poll tax. It is hardly surprising that Barnsley once again ranks 36th out of the 36 metropolitan authorities.
Under the Government's criteria for capping, we shall be allowed a 7 per cent. increase in our capped budget level of £132 million, giving us a capping avoidance target of £141 million—a cash increase of £9·2 million. That is not enough even to fund the effects of current inflation.
Barnsley and the other authorities that form part of the so-called Webber Craig authorities—Rotherham, Doncaster, Sheffield, St. Helens, Wakefield and Wigan—commissioned a survey to determine why it was that we were at the end of the standard spending assessments. The answer was that SSAs fail the test of common sense. They overstate the difference in cost between local authority areas in providing a standard level of service, and place too much reliance on out-of-date and irrelevant data. For example, SSA figures are based on the 1981 population census, which make them nearly 10 years old.
Standard spending assessments also fail to recognise the problems which have confronted those authorities and which they have tried to put over to the Government. I will give one or two examples of alarming differences, and I hope to describe the study in greater detail in Committee.
The cost of running a primary school of 300 children is £58,000 a year, or about £1,000 a week, cheaper in Wakefield than in Bradford. Why does it cost £1,000 a week more to run a school in Bradford than in Wakefield? The cost of running a secondary school of 1,000 children is £278,000 per year, or £10,000 per week, less in Wakefield than in Bradford. What accounts for the tremendous difference between those comparable authorities?
As to personal social services, Wigan is supposed to provide the same standard of service as Manchester at 60 per cent. of Manchester's unit cost. Wigan is allowed £1,925 per child at risk compared with £3,223 for Manchester. It is plain to see that the basis of the comparison is ridiculous.
Similar anomalies are to be found throughout the study. The education standard spending assessments for 1991–92 total almost £15 billion. About 24 per cent. is allocated between local education authorities on the basis of what are called additional educational needs. That element of SSAs is allocated according to the proportion of under-18s living in single parent families, based on 1981 census data; the proportion of dependent children from families receiving income support; and the proportion of under-18s, also based on 1981 census data, who were born

outside the United Kingdom, Ireland, the United States of America or the old Commonwealth, or whose head of household was born outside those areas.
In view of the time, I shall not go into detail on this question and the issues raised by the report compiled by Coopers and Lybrand and the Chartered Institute of Public Finance and Accountancy. I hope that I shall be able to go into more detail in Committee, and to highlight more anomalies between the standard spending assessments in my authority and the assessments in others, such as the city of Manchester, where far more money is allowed.
The principle of the Bill is accountability. If the Government rely upon accountability and the ballot box to decide poll tax levels, the Bill should be scrapped, charge capping should be scrapped, and in future it should be left to the ballot box.

Mr. Harry Barnes: I have been told that I should keep my speech to about three minutes, so I shall make only three points. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) mentioned standard spending assessments. It is quite obvious that the hon. Member for Derbyshire, South (Mrs. Currie), who spoke earlier, does not understand the function and the operation of that formula in Derbyshire, or anywhere else, despite her claimed experience of local government.
The formula uses a number of criteria, such as sparsity and density of population. Dense population in an area might mean that extra money is required, so an extra grant is provided. If the population is very sparse, extra expenditure might also be required, so extra grant is provided. However, if an area is an intricate mixture of sparse and dense population it fails to fit into either category and does not qualify for either grant. My constituency in north-east Derbyshire has precisely that structure, as does Derbyshire as a whole.
In addition, there are provisions for social deprivation—inadequate provisions—but they do not operate in middle-class areas. Therefore, if a working-class population which suffers from deprivation is mixed in with a middle class area—as is the case in Derbyshire—the authority fails to qualify for grants.
Furthermore, grant is taken away from an area if people leave it to go to work. Areas into which people move to work gain grants. In Derbyshire, especially in the north of the county, many people go to Sheffield for work, and so my constituency loses grant. That is why we end up with nonsensical formulas. Even the formula for south Derbyshire—the hon. Lady's constituency—means that, according to Government figures, the standard spending assessment percentages work out at 14 per cent. from revenue support grant, 41 per cent. from business rate and 45 per cent. from poll tax.
Yet we were told that 50 per cent. would come from revenue support and 25 per cent. from the other two areas, including the poll tax. Because of the vast disparity in revenue support grant, one injustice is built upon another and a flat rate tax has become a very high flat rate tax. Perhaps something could be done about the high rate, but it will remain a flat rate tax.
The principle of a flat rate tax produces the other problem that we face because of the poll tax—masses of people are missing from the electoral register because of its


link with the tax. Figures show that there is a shortfall of 600,000 people, missing from the current electoral register, and information suggests that many more will be missing from the new register. Because of the resultant lack of democratic involvement that is a serious crisis for our constitution.
I wonder whether, during the review of the poll tax, which we are supposed to start discussing on Wednesday, anyone will explain how we can begin to refra nchise people once they have been disfranchised by this measure. The poll tax has set in motion something which it will be very difficult to put right.
I hope that the Minister will pay some attention to the state of the electoral register, and give us some sign of what is to be done. The Bill is hopeless and useless. If we are to review the poll tax, and if a new system is to be introduced, it is nonsense to plough on with this measure. On Wednesday we may be told that the tax no longer exists. We have had some nonsensical debates in this House.
I can remember one occasion when we discussed for two hours a Bill which dicl not exist in the Vote Office, so we had to stop the debate. Now we are discussing something which may not exist by Wednesday. Sometimes it is like Monty Python's Flying Circus in here. The Minister had better start to put things right. If he does not, he will be our third successive municipal Mussolini since the introduction of the legislation. Time and again, power has been centralised: it has been repeatedly pushed into the hands of the Government.

Mr. David Blunkett: The Under-Secretary of State was under the misapprehension that I was going to make him speak for about 40 minutes. He was terrified in case he ran out of equations and other algebraic formulas with which to blind us with science.
I congratulate Conservative Front Benchers who have retained their places, and also—in their absence—those who have gained theirs. The gobbledegook that we are discussing cannot hide the divisions in the Conservative party—the differences between one Minister of State, the hon. Member for Enfield, Southgate (Mr. Portillo ), and another, new, Minister of State, the hon. Member for Ealing, Acton (Sir G. Young); the differences between the new Conservative party chairman, the right hon. Member for Bath (Mr. Patten), and the new Secretary of State for the Environment; the differences between the new Secretary of State and the Prime Minister; and, indeed, the differences between Tory Members, within their own ranks, the Department of the Environment and the Government.

Mr. Robert G. Hughes: Will the hon. Gentleman repeat that list?

Mr. Blunkett: I do not need to. There are so many divisions. Wherever we look, we see sections of the Conservative party that are confused about their beliefs about the poll tax.
It must be said for the Minister of State that he has been consistent. He knows where he stands, and, like the last Secretary of State but one, he actually believes in it. My hon. Friend the Member for Dagenham (Mr. Gould) quoted one extract from his speech to the Conservative party conference; I am sure that the Minister will forgive me if I quote another. He said:
When the Prime Minister"—

referring to the last one—
offers you a hot potato, there is only one thing to be said. `Take responsibility for the community charge, Prime Minister? There is nothing in the whole world I would rather do.'
He went on to say:
The funny thing is, I meant it.
That is a strange phenomenon—someone who says that he believes in the poll tax and will fight for it. Those of us who will serve on the Standing Committee want to ensure that the Minister will have plenty of time to spend in the Department doing just that. We know that there will be a battle over the future of the poll tax, and we know that Conservative Members will be debating among themselves how to get out of the corner into which they have dug themselves.
We know that the Secretary of State feels differently from both his predecessor and many of his present colleagues about the abolition of the poll tax. Nothing would suit him better—as I am sure we can imagine him saying when he was offered the job—than to be able to get rid of it. We can imagine the Prime Minister replying, "Just steady on a minute, Michael: it is not abolition that we are after, but a smoke screen in the form of minor amendments"—and what the Under-Secretary of State mentioned during the most recent Environment Questions: jam tomorrow. That is what it is all about.
The new Secretary of State will be aware of the difficulties that he faces. That is why we are seeing a barrage of different proposals aimed at diverting attention from the reality—proposals for education spending to be taken out of the hands of local government, for instance, supported by those who have long wanted it to be taken out of the public sector altogether. We understand that the Secretary of State, who denounced that proposal in an article in The Times last May, is now in favour of it. We also understand that he wants to tinker with the position relating to transitional relief, rebates for elderly people, for those with disabilities and for those whom he described in May as living over the shop.
That is about all that is left in the regulations that the House is due to debate in perhaps a few weeks' time—the remnants of the last review. All that is clear. We see before us confusion, uncertainty, division and duplicity. A united Opposition know where they are going and what they are committed to, whereas the Government no longer have any principles left to them.
Conservative Members "support" most of the principles that underlie the tax. I refer not to that which is now paraded as the principle—that everyone should pay something, which has been aided and abetted by BBC commentators who have emerged on the scene since the poll tax became an exciting issue—but to the principle that was spelt out again and again in the House by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) when the Bill was debated on the Floor of the House and in Committee: that most people should pay a flat rate contribution.
With few exceptions, that was to be the principle. Because of public pressure, there are a few more exceptions now. As a consequence of the principle that the vast majority of people should pay a flat rate, those with lower incomes find that much of their earnings is swallowed up in the poll tax, while those who earn more pay, as a proportion of their earnings, a great deal less.
Apart from the fact that the Bill is a petty and mean little measure, the poll tax issue, and capping, ought to have been debated today as well as on Wednesday. The Bill is about capping. We were promised that the poll tax would lead to accountability, but we never got it. The Bill is an attempt to deal with the confusion and bewilderment that we said many years ago would arise because of the Government's attempt to meddle with local government finance. The introduction of even more restrictions has led to confusion and difficulty of implementation.
The problem was highlighted when the Scottish poll tax Bill was debated. Many hon. Members, including the Secretary of State, appear to have forgotten that there was a Scottish Bill. However, many hon. Members remember those long nights, in 1988, often until about 2 am, when we debated what would happen if the poll tax provisions were implemented and if capping—introduced halfway through the proceedings on the Bill—were imposed. We said again and again that capping would lead to the confusion that faces us now. All those who have held the post of Secretary of State for the Environment believed that poll tax capping was bad.
On 25 March 1990, the right hon. Member for Cirencester and Tewkesbury asked:
Should Government stop councils from this (overspending) or should people who elect councils stop them? I think it should be the latter.
Who could disagree with the right hon. Gentleman? Three days later the right hon. Member for Bath (Mr. Patten), the former Secretary of State for the Environment, said—not to be outdone—that
the best place for resolving these capping issues is in the ballot box.
Who could disagree with him? As my hon. Friend the Member for Dagenham (Mr. Gould) said so ably at the beginning of the debate, the new Secretary of State for the Environment has made it abundantly clear that he too does not believe in poll tax capping.
Who, therefore, believes in poll tax capping? Enough Conservative Members who trooped through the Lobby when the legislation was debated in this place believe in it. Moreover, enough Conservative Members have repeated, in different ways today, that they believe in clobbering—as I believe the hon. Member for Derbyshire, South (Mrs. Currie) would put it—Labour councils. Tory Members are not interested in accountability or local democracy any more. They are willing to sacrifice all to centralism, increased bureaucratic power and litigation which have become predominant in the past few years as a substitute for genuine political debate. Pluralism and diversity are sacrificed to give more power to the hands of a few, supposedly for the benefit of the many.
Lambeth had an all-out election to determine what people wanted. I do not suppose that that matters, although the new Secretary of State says that he believes in all-out elections to determine whether a council should override what the Government believe it should spend. Hardly anybody seems to believe in capping and many people believe in all-out elections as a way of testing public opinion. Judges have determined that Lambeth was right and had acted reasonably and sensibly, but the Bill will have exactly the opposite effect.
The poll tax is affected by so many factors, such as the removal of equalisation between different parts of the

country and the standard spending assessment, which so many hon. Members have referred to and which can affect quite dramatically poll tax poundage. The four different possible packages for standard spending assessment could have resulted in a council such as Hackney have a poll tax of £48 or £606. In inner London, the difference in the preferred packages for the standard spending assessment between the Association of County Councils and the Association of London Authorities was a staggering £326 in each poll tax. Those large sums of money affect the debate about whether poll tax capping and the poll tax are relevant or whether the Bill is simply a diversion from the issues that we should be dealing with.

Mr. James Paice: The hon. Gentleman has spent much time telling us why the community charge should not be capped. Does he accept that the power to cap is on the statute book? The Bill deals with whether the reduced budget should be passed on to charge payers. Does he believe that a reduction in budget, enforced by charge capping, should be passed on to charge payers or used to build up the coffers of the local authority?

Mr. Blunkett: The Bill stems directly from capping. It is not about building up reserves—that cannot be taken into account in the capping process to determine how much has been used year on year—but about how much is in the charge fund and whether it is legal for a council to take account of the changes that have occurred in the period between the original budget-setting meeting and the imposition of capping on the authority. That is the crunch in the Bill.
When Haringey council originally determined its poll tax, it did not have a report on the possible impact of capping on collection rates and on resistance to the poll tax in its area. Lambeth had such a report, and the judges rightly picked out the way in which it had dealt with it and commended it for its "utmost care" in determining how it set its new poll tax level. Lambeth councillors realised that the poll tax, as originally set, would lead to considerable difficulty in collection.
The Minister suggested that councils ought to be able to collect 100 per cent. of the poll tax. If the Bill is based on that assumption, we are living in cloud cuckoo land. I have believed for many years that we are, indeed, living in cloud cuckoo land, but it is incumbent on a Minister who dictates directly to local government the exact poundage that it should levy to have some idea about the difficulties of collecting the tax, which were spelt out by my hon. Friend the Member for Norwood (Mr. Fraser).
No one believes that 100 per cent. collection is possible. No one believes that it is possible in Lambeth. Even a lad from Lambeth running Lambeth from No. 10 instead of from the local town hall could not believe that a 100 per cent. collection rate was possible in Lambeth. Before we debate the Bill in Committee, the Minister should have a word with the Prime Minister about what it is like in Brixton. The Prime Minister might be able to tell him a thing or two about the difficulties. He will certainly be able to tell him that those in Lambeth town hall are not daft. They may disagree with the Minister on fundamentals, but they got it right, and they got it right in court.
We should not be debating this Bill, or deciding what minor regulations the Government might pass before the general election, had it not been for the court case. Now we


have a mathematical formula, which my hon. Friend the Member for Bristol, South (Ms. Primarolo) dealt with so ably. It is an Orwellian dream come true:
In subsection (3)—

(a) in paragraph (c) for the word "other" there shall be substituted the word "qualifying" and after the word "above" there shall be inserted the words "or under this section";
(b) paragraph (d) shall be omitted.
(3) The following subsections shall be inserted after subsection (3)—
(3A) In a case where the precept mentioned in subsection (1) above is issued under section 107(2) below, subsection (3) above shall not apply but subsection (3B) below shall apply.
(3B) In such a case, any amount set in substitution under subsection (1) above must be set in accordance (and only in accordance) with the formula—
A - (B-C)/D
where A, B, C and D have the meanings given by section 35A below.
I congratulate the parliamentary draftsmen on the Bill. It is that kind of nonsense that makes people think that those of us engaged in democratic political debate have lost our marbles. Having had to sit through most of the debate tonight, I am certainly in danger of losing mine.
The Bill stems directly from people's resistance to a tax which is unfair and unadministrable. That resistance finds expression in the electorate's commitment to ensuring that they get rid of the tax in the one way that they know is certain to succeed—by voting out the Government and ensuring that we have a Labour Government next time.
Instead of reverting to the rational assumptions that all of us expected following the leadership battle, Conservative Members have deserted common sense and decided to do what most of us would describe as fiddling while Rome burns. In local government, we have a whistle blower. We now have a trumpet blower on the Government Front Bench and those who fiddle while the world goes on around them. While that happens, people outside are suffering. Services are being cut and things that matter to people are being destroyed.
The Government may be taking the powers that they want to determine every last detail of local government spending. In taking those powers, they are not displaying wisdom, understanding or caring. They do not understand the consequences of what they are doing.
Councils must balance their books, and decisions must be taken on how to ensure that services are protected. Instead, we discuss minute algebraic formulas about how the Government can have their way. Most people outside this place, if they could hear this debate, would understand that this is a petty little Bill and that its petty mentors should be rejected at the first possible opportunity.
It is not the amendment of the tax but its outright abolition that we shall seek to achieve in the general election. There is only one choice. It does not lie with those who want to amend the legislation slightly; it does not lie with those who want to hide behind smoke screens or to engage in political expediency. It lies with those who have constantly and continuously rejected the poll tax, who have argued against it and who have a clear alternative which accords with the views of the ex-Chancellor of the Exchequer.
We will be able to do something about it. We will abolish the poll tax as soon as we are elected to office. The choice is clear. We believe in what we are doing, and we will ensure that we do it at the first opportunity.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): This has been an extremely good-natured and largely constructive debate. I hope very much that the hon. Member for Sheffield, Brightside (Mr. Blunkett) does not lose his marbles, as that would be most distressing for all of us, not least because we have learnt to respect his contribution to the local government debate. I have already had an opportunity to meet him in a statutory instruments Standing Committee. I look forward to many more happy hours, happy months and happy years, with the hon. Gentleman on the Opposition Front Bench and me on the Government Front Bench.
The hon. Member for Brightside and I have several things in common. I suspect that we both enjoy working in local government. That does not come easily to some people on both sides of the House, but to him and me it is important to begin from the standpoint of believing in what we are doing and enjoying it.
I have a high regard for what is best in local government. In the few weeks that I have held this office, I have learned from my experience and from the people whom I have met in many of our great cities, including Liverpool, Manchester, Birmingham, Sheffield and London, and in the shire counties that are my home and the part of the country that I represent.
I suspect that we face a dichotomy. Either we accept that there must be common ground between politicians on both sides in the interests of the people whom we serve or we can have localised skirmishes in the House and forget the interests of the people in the communities that we represent. The hon. Member for Brightside said that councils must balance their books and, like me, he clearly has realistic aspirations for local councils.
However, the debate has ranged widely and too often it ignored the fact that this is a short Bill with a simple purpose—that is, to protect charge payers by ensuring that authorities can no longer seek to deprive charge payers of the full benefits of capping. It amends existing law by prescribing exactly how charges must be set after capping, thereby guaranteeing that the cuts that an authority must make because of capping will lead to commensurate reductions in charges.
The Bill requires authorities to use a formula that gives no flexibility or discretion to authorities to cheat hard-pressed local people. The arithmetic is not particularly difficult. I noted with interest the contrast between the difficulty described by the hon. Member for Brightside and the view expressed by his hon. Friend the hon. Member for Norwood (Mr. Fraser).
The important point is that the Bill does not affect our existing powers to cap local authorities. It complements them, to control local spending and protect local people from the effects of excessive budgets, by ensuring that they derive the full benefit of the Government's intervention on their behalf.
We have heard much from Opposition Members about how the Bill is a further attack on local government. There have been wild assertions that the Bill is the final nail in the coffin of local democracy. The truth is entirely different. As my hon. Friend the Minister for Local Government and Inner Cities made clear, the Government have always held that local authority spending cannot be exempt from control, as the hon. Member for Brightside has just confirmed. Parliament has given us powers to do that. We


have used those powers and we shall not hesitate to do so again if necessary. The Bill does not alter that position. It ensures that local people will be fully protected from their council if, disregarding their interests, it chooses to budget excessively.

Mr. Nellist: Is not the essence of the Bill the fact that Lambeth said this summer that it could not see itself collecting any more than 85 per cent. of the poll tax and that the Government said that it should be able to collect 100 per cent.? The Bill gives the Secretary of State power to set poll tax levels that local councils would not be able to vary. Has the Under-Secretary of State looked, as I looked this afternoon, at the figures for Scotland, which is one year ahead with the poll tax, and realised that, in October last year, the amount of uncollected poll tax was £142 million or 14·7 per cent. of the poll tax and that, this October, it was £623 million or 59·2 per cent. of the poll tax? Is not that a demonstration that councils that are trying to tell the Government that the poll tax is essentially uncollectable have only to look to Scotland for the lesson?

Mr. Key: I do not know whether to be grateful to the hon. Gentleman. The hon. Member for Brightside said that he was afraid that I would run out of notes. With interventions of that length, there is no danger of my doing that. I shall refer to the hon. Gentleman's point about Lambeth in one moment.
One of the interesting things that has happened in recent weeks is that I have met several delegations from local authorities who have complained about several points, such as their standard spending assessments and the indicators that are used to make them up. It has become clear to me that, as local authorities have come to recognise the way in which the system works, they have become very much more sophisticated in their criticism of the indicators and have come to present their worries and fears to the Government. That is all part of the system. That is what it is about. That is what the consultation exercise has been about.
On Lambeth in particular, the hon. Member for Coventry, South-East (Mr. Nellist) talked about the problem of the collection of rates under the old rating system. Let me give the House some examples of rate arrears now outstanding for 1988–89, the latest year for which figures are available. The hon. Gentleman referred to Bath in particular. The figure for Bath is 0·8 per cent. outstanding, for Westminster it is 2·6 per cent. outstanding, and for Wandsworth it is 8·1 per cent. outstanding. The hon. Gentleman should contrast those efficient Conservative-controlled authorities with Lambeth's 20 per cent. outstanding and the 12·7 per cent. for Liverpool. I sometimes wonder about Lambeth, as do my hon. Friends the Members for Harrow, West (Mr. Hughes) and for Kensington (Mr. Fishburn).
Not the Government, but the council's senior official, said that the financial difficulties in Lambeth were near catastrophic, and he criticised the corruptness of its administrative system. He said that the final accounts for Lambeth had not been prepared for any year since 1985 and that, with less than half the poll tax collected, its financial position was dire.
According to the Local Government Chronicle, the council's report said that Lambeth's poll tax register was

out of date, listing properties that had been demolished, some of which lie outside the borough boundaries. It warned that, the local council must issue more than 40,000 poll tax bills that have yet to be sent out and urged the borough to take tough action with defaulters to stave off a financial crisis. Furthermore, the senior officer said that the introduction and the handling of the poll tax had been woefully inadequate, with officers having to force members into taking decisions. That is not something of which any council should be proud, whatever its political colour.
I was sorry that the hon. Member for Eastbourne (Mr. Bellotti), who is not in his place, thought it necessary to parade a lot of problems affecting Eastbourne when he did not take the trouble to bring a delegation to see me, along with many other councils from all sides of the political spectrum. Therefore, we do not know the substance of the hon. Gentleman's problem.
The hon. Member for Dagenham (Mr. Gould) made it clear that he saw the Bill's purpose as being
to make the poll tax cap fit even tighter".
Much of his speech was based on that assertion. Even with the wildest imagination, I cannot see how the hon. Gentleman can conclude that the purpose of the Bill is to tighten the fit of a cap. The Bill does not affect the existing powers to cap local authorities. Nor does it affect the way in which we should approach the exercise of our capping powers. It does not even mean a change in the way in which a capped authority should approach reducing its budget to conform with the cap set for it. Therefore, the cap is neither tighter nor looser. The Bill simply ensures that, once a capped authority has received its budget and revised it, it must pass on to its charge payers the full benefit of those budget reductions.
I remind the hon. Gentleman of the quotation from the Leader of the Opposition that we have often heard recently. His right hon. Friend referred to the "most unjust" of all taxes, the local rates, which take the most from those who can afford least. Many right hon. and hon Members of all parties have stated that it is impossible to achieve a 100 per cent. level of collection. Perhaps that is the case, but the objective of every council should be to try to achieve 100 per cent. It is preposterous to justify non-collection on the grounds that it is not possible to achieve 100 per cent.
One of the more interesting contributions was made by my hon. Friend the Member for Lancashire, West (Mr. Hind), who talked about the cost of collection to local people. I was pleased to note that a report from the Audit Commission a couple of months ago gave a lot of useful advice to local authorities. The cost of collection varies astonishingly from one local authority to another—from about £5 per head to about £20 a head—and that has nothing to do with the political colour of the controlling party in the local authority. It has a great deal to do with the efficiency of collection and with the interest taken by the authority in carrying out that collection.

Mr. Allen McKay: Is it not a fact that the expense incurred is not so much that of the actual collection, but the cost of the software and that involved in setting up the computer system?

Mr. Key: There have been computer software problems, but most of them have been ironed out. The most significant factor in the variation in the cost of collection lies in the nature of the constituency. I accept that collection is more expensive in, for example, urban


areas. There is no argument about that. As was the case with rates, it is more expensive to collect the community charge where there is a large and mobile population. Although I accept that, there is still enormous room for efficiency improvements.
My hon. Friend the hon. Member for Nottingham, South (Mr. Brandon-Bravo) spoke about a backlash against non-payers. That is clearly growing, and it is something that Opposition Members who refuse to pay their community charge should start considering seriously.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) made an important speech, which I very much enjoyed. Although he criticised the Bill for being absurd and full of complex detail, in his next breath he complained about a lack of attention to detail. His comparison with other Community countries was very important. He asked why our country alone appears to have such a complex system.
I am not sure whether the hon. Gentleman is fully aware of some of the complexities of the systems in other countries. In some countries, local government receives a prescribed proportion of national income tax, redistributed according to the tax-raising capacity of the region, as in Austria or Germany, or as a grant according to need, as in Japan. Japan also has an inhabitant's tax, accounting for 48 per cent. of local income tax and comprising a flat-rate charge and an income-related element. It is no good simply to argue against complexity in such cases.
I congratulate my hon. Friend the Member for Gedling (Mr. Mitchell) on his important contribution. He said that a large number of Labour authorities have been able to reduce their expenditure without the cuts in services about which some of them have circulated stories in a thoroughly scaremongering fashion.

Mr. Harry Barnes: The Minister is making a strong case in favour of the poll tax. Does he still believe in the poll tax or will he take the view of his constituent, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who says that it is a Tory tax that should be smashed?

Mr. Key: I agree absolutely, and think that most people would agree that there should be a tax for local services paid for by the vast majority of people. Such a tax is absolutely right, and I continue to support it.

Mr. Blunkett: To help the Minister pad out his material, I shall ask him whether, if he believes in that principle, he still believes in the principle of the flat rate.

Mr. Key: Oh, yes. I certainly believe in the principle of a flat-rate tax as long as, as in the case of the community charge, about one quarter of all those who pay it are subject to a rebate system. That is exactly the sort of system that we want and I look forward to further refinements.
The hon. Member for Bristol, South (Ms. Primarolo) talked about Lambeth's incompetence and the need to look at Bristol. If we do so, we can see how well the authority has done. The figures for Bristol show that the citizens of the hon. Lady's constituency have benefited by about £88 each under the present arrangements. She also made serious points about the Lambeth legal case and judgment and referred to the judges, who were dealing with the law as it stood.
Tonight, we are debating the principle of whether a local authority should be able to deny its charge payers the

full benefit of budget reductions made as a result of capping. The issue is clear. What motive can there be for seeking to deny hard-pressed charge payers the full benefits of capping? There can be no justification for denying them that. The pinciple enshrined in the Bill is clear and right.

Mr. Holt: Today's debate should have been about capping. During the contribution of the hon. Member for Dagenham (Mr. Gould), I asked him whether a Labour Government would place any ceiling on local council expenditure. He dodged that question; he is not listening now—that is the measure of the man.

Mr. Key: I think that the hon. Member for Brightside had the right idea when he said that councils had to balance their books.
The hon. Member for Norwood referred to a double cut being brought about by the Bill. He suggested that the Bill would lead to a capped authority having to make further cuts to its budget in addition to those required by the cap to allow for non-collection. That is not the case—the Bill does not change the way in which an authority is capped. I shall give details in writing of how that system will work because I do not have time now.
I congratulate my hon. Friend the hon. Member for Nottingham, South on his contribution and am glad that he, like me, has no sympathy for the "won't pay" brigade. His constituents are fortunate to have someone like him to represent their interests in the House.
The hon. Member for Brightside was kind enough to give me warning of his speech in a press release issued this morning, in which he described the Bill as "gobbledygook, a lawyer's parasite"—[Laughter.]—paradise, I should have said. He said that the Bill was mathematical nonsense. I refer him to his hon. Friend the Member for Norwood.
The Bill is an important measure to guarantee protection to charge payers from councils that do not care how much they spend or about the burdens that they place on local people. The Government care, and that is why we have introduced this worthwhile Bill, which I call on the House to support.

Question put, That the Bill be now read a Second time:

The House divided: Ayes 307, Noes 224.

Division No. 16]
[10 pm


AYES


Aitken, Jonathan
Blackburn, Dr John G.


Alexander, Richard
Blaker, Rt Hon Sir Peter


Allason, Rupert
Body, Sir Richard


Amery, Rt Hon Julian
Bonsor, Sir Nicholas


Amess, David
Boscawen, Hon Robert


Amos, Alan
Boswell, Tim


Arbuthnot, James
Bottomley, Peter


Arnold, Jacques (Gravesham)
Bowden, A (Brighton K'pto'n)


Arnold, Sir Thomas
Bowden, Gerald (Dulwich)


Ashby, David
Bowis, John


Aspinwall, Jack
Boyson, Rt Hon Dr Sir Rhodes


Atkins, Robert
Brandon-Bravo, Martin


Atkinson, David
Brazier, Julian


Baker, Rt Hon K. (Mole Valley)
Bright, Graham


Baker, Nicholas (Dorset N)
Brown, Michael (Brigg &amp; Cl't's)


Baldry, Tony
Browne, John (Winchester)


Banks, Robert (Harrogate)
Bruce, Ian (Dorset South)


Batiste, Spencer
Buchanan-Smith, Rt Hon Alick


Bellingham, Henry
Buck, Sir Antony


Bendall, Vivian
Budgen, Nicholas


Bennett, Nicholas (Pembroke)
Burns, Simon


Bevan, David Gilroy
Burt, Alistair


Biffen, Rt Hon John
Butcher, John






Butler, Chris
Hawkins, Christopher


Butterfill, John
Hayes, Jerry


Carlisle, John, (Luton N)
Hayward, Robert


Carlisle, Kenneth (Lincoln)
Heathcoat-Amory, David


Carrington, Matthew
Heseltine, Rt Hon Michael


Carttiss, Michael
Hicks, Mrs Maureen (Wolv' NE)


Chalker, Rt Hon Mrs Lynda
Higgins, Rt Hon Terence L.


Channon, Rt Hon Paul
Hill, James


Chapman, Sydney
Hind, Kenneth


Chope, Christopher
Hogg, Hon Douglas (Gr'th'm)


Churchill, Mr
Holt, Richard


Clark, Hon Alan (Plym'th S'n)
Hordern, Sir Peter


Clark, Dr Michael (Rochford)
Howard, Rt Hon Michael


Clark, Sir W. (Croydon S)
Howarth, G. (Cannock &amp; B'wd)


Clarke, Rt Hon K. (Rushcliffe)
Howell, Rt Hon David (G'dford)


Colvin, Michael
Hughes, Robert G. (Harrow W)


Conway, Derek
Hunt, David (Wirral W)


Coombs, Anthony (Wyre F'rest)
Hunter, Andrew


Coombs, Simon (Swindon)
Irvine, Michael


Cope, Rt Hon John
Irving, Sir Charles


Cormack, Patrick
Jack, Michael


Couchman, James
Jackson, Robert


Cran, James
Janman, Tim


Critchley, Julian
Johnson Smith, Sir Geoffrey


Currie, Mrs Edwina
Jones, Gwilym (Cardiff N)


Davies, Q. (Stamf'd &amp; Spald'g)
Jones, Robert B (Herts W)


Davis, David (Boothferry)
Jopling, Rt Hon Michael


Day, Stephen
Kellett-Bowman, Dame Elaine


Devlin, Tim
Key, Robert


Dicks, Terry
King, Roger (B'ham N'thfield)


Dorrell, Stephen
King, Rt Hon Tom (Bridgwater)


Douglas-Hamilton, Lord James
Kirkhope, Timothy


Dover, Den
Knapman, Roger


Dunn, Bob
Knight, Greg (Derby North)


Durant, Tony
Knight, Dame Jill (Edgbaston)


Dykes, Hugh
Knowles, Michael


Eggar, Tim
Lamont, Rt Hon Norman


Emery, Sir Peter
Lawrence, Ivan


Evans, John (St Helens N)
Lee, John (Pendle)


Evennett, David
Leigh, Edward (Gainsbor'gh)


Fallon, Michael
Lester, Jim (Broxtowe)


Favell, Tony
Lloyd, Sir Ian (Havant)


Field, Barry (Isle of Wight)
Lloyd, Peter (Fareham)


Fishburn, John Dudley
Luce, Rt Hon Richard


Fookes, Dame Janet
Lyell, Rt Hon Sir Nicholas


Forth, Eric
McCrindle, Sir Robert


Fowler, Rt Hon Sir Norman
Macfarlane, Sir Neil


Fox, Sir Marcus
MacGregor, Rt Hon John


Franks, Cecil
MacKay, Andrew (E Berkshire)


Freeman, Roger
Maclean, David


French, Douglas
McLoughlin, Patrick


Fry, Peter
McNair-Wilson, Sir Patrick


Gale, Roger
Madel, David


Gardiner, George
Malins, Humfrey


Garel-Jones, Tristan
Mans, Keith


Gill, Christopher
Maples, John


Glyn, Dr Sir Alan
Marland, Paul


Goodhart, Sir Philip
Marlow, Tony


Goodlad, Alastair
Marshall, John (Hendon S)


Goodson-Wickes, Dr Charles
Marshall, Sir Michael (Arundel)


Gorman, Mrs Teresa
Martin, David (Portsmouth S)


Gorst, John
Maxwell-Hyslop, Robin


Grant, Sir Anthony (CambsSW)
Mayhew, Rt Hon Sir Patrick


Greenway, Harry (Ealing N)
Mellor, David


Greenway, John (Ryedale)
Meyer, Sir Anthony


Gregory, Conal
Miller, Sir Hal


Griffiths, Peter (Portsmouth N)
Mills, lain


Grist, Ian
Mitchell, Andrew (Gedling)


Ground, Patrick
Mitchell, Sir David


Gummer, Rt Hon John Selwyn
Moate, Roger


Hague, William
Monro, Sir Hector


Hamilton, Hon Archie (Epsom)
Montgomery, Sir Fergus


Hamilton, Neil (Tatton)
Moore, Rt Hon John


Hampson, Dr Keith
Morrison, Rt Hon P (Chester)


Hanley, Jeremy
Moss, Malcolm


Hannam, John
Moynihan, Hon Colin


Hargreaves, A. (B'ham H'll Gr')
Mudd, David


Harg reaves, Ken (Hyndburn)
Neale, Gerrard


Harris, David
Nelson, Anthony


Haselhurst, Alan
Neubert, Michael





Newton, Rt Hon Tony
Steen, Anthony


Nicholls, Patrick
Stern, Michael


Nicholson, David (Taunton)
Stevens, Lewis


Nicholson, Emma (Devon West)
Stewart, Allan (Eastwood)


Norris, Steve
Stewart, Andy (Sherwood)


Onslow, Rt Hon Cranley
Stewart, Rt Hon Ian (Herts N)


Oppenheim, Phillip
Summerson, Hugo


Page, Richard
Tapsell, Sir Peter


Paice, James
Taylor, Ian (Esher)


Parkinson, Rt Hon Cecil
Taylor, Teddy (S'end E)


Patnick, Irvine
Tebbit, Rt Hon Norman


Patten, Rt Hon Chris (Bath)
Temple-Morris, Peter


Patten, Rt Hon John
Thatcher, Rt Hon Margaret


Pattie, Rt Hon Sir Geoffrey
Thorne, Neil


Pawsey, James
Thornton, Malcolm


Peacock, Mrs Elizabeth
Thurnham, Peter


Porter, Barry (Wirral S)
Townsend, Cyril D.(B'heath)


Porter, David (Waveney)
Tracey, Richard


Portillo, Michael
Tredinnick, David


Powell, William (Corby)
Trippier, David


Price, Sir David
Trotter, Neville


Raffan, Keith
Twinn, Dr Ian


Raison, Rt Hon Timothy
Vaughan, Sir Gerard


Renton, Rt Hon Tim
Viggers, Peter


Rhodes James, Robert
Wakeham, Rt Hon John


Riddick, Graham
Waldegrave, Rt Hon William


Ridsdale, Sir Julian
Walden, George


Rifkind, Rt Hon Malcolm
Walker, Bill (T'side North)


Roberts, Sir Wyn (Conwy)
Walker, Rt Hon P. (Wcester)


Rossi, Sir Hugh
Waller, Gary


Rost, Peter
Walters, Sir Dennis


Rowe, Andrew
Wardle, Charles (Bexhill)


Rumbold, Mrs Angela
Warren, Kenneth


Ryder, Richard
Watts, John


Sackville, Hon Tom
Wells, Bowen


Sainsbury, Hon Tim
Wheeler, Sir John


Sayeed, Jonathan
Whitney, Ray


Scott, Rt Hon Nicholas
Widdecombe, Ann


Shaw, David (Dover)
Wiggin, Jerry


Shaw, Sir Giles (Pudsey)
Wilkinson, John


Shaw, Sir Michael (Scarb')
Wilshire, David


Shephard, Mrs G. (Norfolk SW)
Winterton, Mrs Ann


Shepherd, Colin (Hereford)
Winterton, Nicholas


Shepherd, Richard (Aldridge)
Wolfson, Mark


Shersby, Michael
Wood, Timothy


Sims, Roger
Yeo, Tim


Skeet, Sir Trevor
Young, Sir George (Acton)


Smith, Tim (Beaconsfield)
Younger, Rt Hon George


Soames, Hon Nicholas



Spicer, Sir Jim (Dorset W)
Tellers for the Ayes:


Spicer, Michael (S Worcs)
Mr. David Lightbown and


Stanbrook, Ivor
Mr. John M. Taylor


Stanley, Rt Hon Sir John





NOES


Abbott, Ms Diane
Bradley, Keith


Allen, Graham
Bray, Dr Jeremy


Anderson, Donald
Brown, Gordon (D'mline E)


Archer, Rt Hon Peter
Brown, Nicholas (Newcastle E)


Armstrong, Hilary
Buckley, George J.


Ashley, Rt Hon Jack
Caborn, Richard


Ashton, Joe
Callaghan, Jim


Banks, Tony (Newham NW)
Campbell, Menzies (Fife NE)


Barnes, Harry (Derbyshire NE)
Campbell, Ron (Blyth Valley)


Barnes, Mrs Rosie (Greenwich)
Campbell-Savours, D. N.


Barron, Kevin
Canavan, Dennis


Battle, John
Cartwright, John


Beckett, Margaret
Clark, Dr David (S Shields)


Beith, A. J.
Clarke, Tom (Monklands W)


Bell, Stuart
Clay, Bob


Bellotti, David
Clelland, David


Benn, Rt Hon Tony
Clwyd, Mrs Ann


Bennett, A. F. (D'nt'n &amp; R'dish)
Cohen, Harry


Benton, Joseph
Coleman, Donald


Bermingham, Gerald
Cook, Robin (Livingston)


Bidwell, Sydney
Corbett, Robin


Blair, Tony
Corbyn, Jeremy


Blunkett, David
Cousins, Jim


Boateng, Paul
Crowther, Stan


Boyes, Roland
Cryer, Bob






Cummings, John
Howarth, George (Knowsley N)


Cunliffe, Lawrence
Howell, Rt Hon D. (S'heath)


Cunningham, Dr John
Howells, Geraint


Dalyell, Tarn
Howells, Dr. Kim (Pontypridd)


Davies, Rt Hon Denzil (Llanelli)
Hoyle, Doug


Davies, Ron (Caerphilly)
Hughes, John (Coventry NE)


Davis, Terry (B'ham Hodge H'l)
Hughes, Robert (Aberdeen N)


Dewar, Donald
Hughes, Roy (Newport E)


Dixon, Don
Hughes, Simon (Southwark)


Dobson, Frank
Illsley, Eric


Doran, Frank
Ingram, Adam


Duffy, A. E. P.
Janner, Greville


Dunnachie, Jimmy
Jones, Barry (Alyn &amp; Deeside)


Dun woody, Hon Mrs Gwyneth
Jones, leuan (Ynys Môn)


Eadie, Alexander
Jones, Martyn (Clwyd S W)


Evans, John (St Helens N)
Kaufman, Rt Hon Gerald


Ewing, Harry (Falkirk E)
Kennedy, Charles


Fatchett, Derek
Kilfedder, James


Faulds, Andrew
Kinnock, Rt Hon Neil


Field, Frank (Birkenhead)
Kirkwood, Archy


Fields, Terry (L'pool B G'n)
Lamond, James


Fisher, Mark
Leadbitter, Ted


Flannery, Martin
Lestor, Joan (Eccles)


Flynn, Paul
Lewis, Terry


Foot, Rt Hon Michael
Litherland, Robert


Foster, Derek
Livingstone, Ken


Fraser, John
Lloyd, Tony (Stretford)


Fyfe, Maria
Lofthouse, Geoffrey


Galloway, George
Loyden, Eddie


Garrett, John (Norwich South)
McAllion, John


George, Bruce
McAvoy, Thomas


Gilbert, Rt Hon Dr John
McCartney, Ian


Godman, Dr Norman A.
Macdonald, Calum A.


Golding, Mrs Llin
McFall, John


Gordon, Mildred
McKay, Allen (Barnsley West)


Gould, Bryan
McKelvey, William


Graham, Thomas
McLeish, Henry


Griffiths, Nigel (Edinburgh S)
Maclennan, Robert


Griffiths, Win (Bridgend)
McNamara, Kevin


Grocott, Bruce
McWilliam, John


Hardy, Peter
Madden, Max


Harman, Ms Harriet
Mahon, Mrs Alice


Hattersley, Rt Hon Roy
Marek, Dr John


Heal, Mrs Sylvia
Marshall, David (Shettleston)


Healey, Rt Hon Denis
Marshall, Jim (Leicester S)


Henderson, Doug
Martin, Michael J. (Springburn)


Hinchliffe, David
Martlew, Eric


Hoey, Ms Kate (Vauxhall)
Maxton, John


Hogg, N. (C'nauld &amp; Kilsyth)
Meacher, Michael


Home Robertson, John
Meale, Alan


Hood, Jimmy
Michael, Alun





Michie, Bill (Sheffield Heeley)
Shore, Rt Hon Peter


Molyneaux, Rt Hon James
Short, Clare


Moonie, Dr Lewis
Skinner, Dennis


Morgan, Rhodri
Smith, Andrew (Oxford E)


Morris, Rt Hon A. (W'shawe)
Smith, C. (lsl'ton &amp; F'bury)


Morris, Rt Hon J. (Aberavon)
Smith, J. P. (Vale of Glam)


Mowlam, Marjorie
Snape, Peter


Mullin, Chris
Soley, Clive


Murphy, Paul
Spearing, Nigel


Nellist, Dave
Steel, Rt Hon Sir David


Oakes, Rt Hon Gordon
Steinberg, Gerry


O'Brien, William
Stott, Roger


O'Hara, Edward
Strang, Gavin


O'Neill, Martin
Straw, Jack


Orme, Rt Hon Stanley
Taylor, Mrs Ann (Dewsbury)


Patchett, Terry
Taylor, Matthew (Truro)


Pendry, Tom
Thompson, Jack (Wansbeck)


Pike, Peter L.
Turner, Dennis


Prescott, John
Vaz, Keith


Primarolo, Dawn
Wai ley, Joan


Quin, Ms Joyce
Wardell, Gareth (Gower)


Radice, Giles
Wareing, Robert N.


Randall, Stuart
Watson, Mike (Glasgow, C)


Redmond, Martin
Welsh, Michael (Doncaster N)


Rees, Rt Hon Merlyn
Wigley, Dafydd


Reid, Dr John
Williams, Rt Hon Alan


Richardson, Jo
Williams, Alan W. (Carm'then)


Robertson, George
Wilson, Brian


Robinson, Geoffrey
Winnick, David


Rogers, Allan
Wise, Mrs Audrey


Rooker, Jeff
Worthington, Tony


Rooney, Terence
Wray, Jimmy


Ross, Ernie (Dundee W)
Young, David (Bolton SE)


Rowlands, Ted



Ruddock, Joan
Tellers for the Noes:


Sedgemore, Brian
Mr. Frank Haynes and


Sheerman, Barry
Mr. Ken Eastham


Sheldon, Rt Hon Robert

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61(Committal of Bills).

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting the Caravans (Standard Community Charge and Rating) Bill and the Ways and Means Motion may be proceeded with, through opposed,until any hour.—[Mr.Neil Hamilton.]

Orders of the Day — Caravans (Standard Community Charge and Rating) Bill

Ordered for Second Reading read.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): I beg to move, That the Bill be now read a Second time.
The Bill is a technical measure, which will be welcomed by a substantial number of holiday caravan owners who, contrary to our intention in 1988, are, as the law now stands, liable to the standard community charge. During the consideration of the Local Government Finance Act 1988, the Government gave a commitment that holiday caravans and the pitches on which they stand would be non-domestic-rated. It subsequently emerged that an amendment that we made to the then Bill did not have the desired effect and that the owners of many holiday caravans were subject to the standard community charge.
The Bill therefore removes all standard charge liability from the owners of caravans that are not used as a sole or main residence. Instead, it makes all caravan pitches and the caravans occupying them, which are not used as a sole or main residence, subject to non-domestic rates. As we announced on 30 March, the provisions will have effect retrospectively to 1 April 1990. Anyone who has paid the standard charge in respect of a caravan will be entitled to have that sum refunded.
The Bill includes separate provisions for Scotland, and which have the same effect as those south of the border. Two further provisions are proposed that are specific to Scotland. First, because some caravan owners paid the standard charge last year, provision is made for repayment of half that amount. Secondly, a minor change is needed to the existing provisions on the derating of caravans to permit my right hon. Friend the Secretary of State for Scotland—

Mr. Dick Douglas (Dumfermline, West): Are the Government conceding the principle of retrospectivity for Scotland? If so, should not that example be followed in other measures that might be considered within the Minister's Department?

Mr. Portillo: The Bill has retrospective effect in England, Wales and Scotland. It has an additional retrospective element for Scotland. I do not envisage any connection between this Bill and any other legislation that the Government might or might not bring before the House.
A minor change is needed to the existing provisions on the derating of caravans to permit my right hon. Friend the Secretary of State to deal with the fact that the rateable values of caravans in Scotland are, in general, higher than those in England and Wales. I commend the Bill to the House.

Mr. William O'Brien: This Bill is another attempt to adjust the poll tax, this time in respect of caravans. It is a further example of the Government, having got the poll tax wrong, making a slight amendment. It may be of help to some, but there are other issues that the Minister must address.
The Local Government Finance Act 1988 made reference also to holiday chalets on caravan sites, and we were given to understand that chalets were encompassed by the provisions for caravans. In Committee on the Local Government Finance Bill in February 1988, mention was made of the significant problems that would arise in respect of caravans and chalets. The hon. Member for Bournemouth, East (Mr. Atkinson) warned of the serious consequences of neglecting consideration of such properties. Unless we provide for them now, we shall all be back in a few months' time debating them again.
The explanatory and financial memorandum states that clause I repeals
other references to caravans in consequence.
It refers also to caravans
other than those used as a sole or main residence".
The same applies in principle to chalets, so may we presume that chalets are included in the provisions for the standard rate of poll tax that applies to caravans?
The sites concerned are not protected, have planning permission or site licences for holiday use only, or are those on which year-round occupation is prohibited. Those terms apply to chalets just as much as to caravans. The residents of chalets, like those of caravans, have only limited services provided to them by local authorities, so they pay for services that they do not receive. The Government criterion that people should pay for the services provided was an element in our debates on the standard charges. People who own or occupy chalets have no votes in the county or district in which those properties are located, so local authority members are not accountable to them.
Chalet owners in the Southcliffe area of Skipsey in east Yorkshire paid £189 in rates in the year 1988–89. However, the poll tax payable on those same properties is £326 per person. Because the local authority charges double poll tax in line with the Government's formula, a retired single person who occupies a chalet for a few weeks during the year must pay £652 in poll tax, in comparison with £180 under the old rating system. That is an increase in one year of £470.
In Committee on the Local Government Finance Bill, the hon. Member for Bournemouth, West (Mr. Butterfill) said:
A similar but rather more serious problem will arise with caravans and chalets. I am talking about not the sort of chalet accommodation with which hon. Members may be familiar from such television programmes as 'Hi-De-Hi', but the rather more sophisticated accommodation that is available in holiday centres. That, too, is a rapidly expanding sector of the leisure and tourism industry in the United Kingdom. Again, the law is not clear and I shall he grateful if my hon. Friend will advise us further.
It seems possible that chalets used for that sort of accommodation may be deemed to be residences under the clause and, therefore, subject to a standard community charge with a multiplier of two. 
Some hon. Members have spoken to me about the matter. It is causing great anxiety because the implied level of taxation would be up to five times the existing rating levels for business premises. I am sure that that is not my hon. Friend's intention. It was made clear earlier that the Government's intention on business premises is to be broadly neutral and that they do not seek to increase the total sum that will be received under the Bill.
If the effect of the provision is as feared by that part of the holiday industry, I hope that my hon. Friend will undertake to look again at the matter"—[Official Report, Standing Committee E;4 February 1988, c. 379.]


We are now considering that very question which was raised by the hon. Member. Has the Minister considered the serious matter that his hon. Friend referred to when we were discussing the matter in Committee in February 1988? Is an increase of £470 in one year justified?
It is disappointing. Proposals were made by members of the Standing Committee on both sides of the House—our discussions on caravans and chalets continued for some considerable time. The then Minister, the hon. Member for Southampton, Itchen (Mr. Chope) promised that the matter raised by the hon. Member for Bournemouth, West would be examined. However, two and half years later, we are debating only half of the problem. When will we be back here again, having to put right further anomalies in this legislation, particularly standing charges?
The hon. Member for Southampton, Itchen, who was the Minister when the Bill was in Committee, suggested that local authorities would use the formula allowed in the Bill to regulate the amount of poll tax to be paid. It was then suggested that some local authorities would charge only half of the community charge on, or would even zero-rate, chalets with small rateable values. We have found that that is not the case, because local authorities are pressed to obtain income and resources.
That is why they have been charging double poll tax on caravans and chalets and that is why we are here—the legislation is not working. Unless we reconsider the rateable values of such properties—which is the basis for the proposals in the Bill—and for all holiday homes, we shall be in greater difficulties as time goes by.
This anomaly is a further example of how the legislation is mistaken. To use the words of the present Secretary of State, the right hon. Member for Henley (Mr. Heseltine), in a debate on the Local Government Finance Bill held in April 1988
as a priority we should reform rather than replace the rates."—[Official Report, 18 April 1988; Vol. 131, c. 620.]
That is the way that we should approach this matter. He was explaining to the House that, in 1979, when he was a member of the Shadow Cabinet, it was not difficult to persuade his colleagues that reform of the rates was the only solution when considering the replacement of domestic rates. That is what we are doing tonight: we are reforming the rating system again.
This two-clause Bill dealing with the rating of caravans is a further demonstration that the Government have got it wrong again, and that the poll tax legislation must be amended. Far be it from me to say, "We told you so," but Conservative Members who read the Standing Committee debates will see that hon. Members on both sides pressed for caravans and chalets to be excluded from the standard poll tax charge.
We do not oppose the Bill, because we believe that the rateable value system is the best way to attract income from holiday caravans and chalets. Let me ask the Minister, however, whether he intends to include in the legislation provision for chalet holiday homes, which are in the same bracket as caravans.

Mr. Jerry Wiggin: My speech—which will be extremely brief—concerns an omission from the Bill. First, let me declare my interest as adviser to the British Marine Industries Federation.
In the other place, the Under-Secretary of State admitted that the Local Government Finance A ct 1988

was deficient in relation to the rating of moorings. Exactly the same principle applies to caravans. It is a question of the unified business rate being applied to the whole of a marine—or, rather, the whole of a mooring site—rather than to each individual mooring.
I corresponded with the Government, pleading with them to include that minor point in the Bill. I am deeply sorry that they have not done so; I hope that the Minister will reassure us that he will do so at the earliest possible opportunity, and request that valuation officers consider it done when dealing with such matters "on the ground".

Mr. Gordon Oakes: I have considerable sympathy with the views of the hon. Member for Weston-super-Mare (Mr. Wiggin). I want to ask some technical questions, ranging a little more widely than his.
The fact that we are debating the Bill at all means that the Government know and accept that they have made a mistake; otherwise, there would be no need for it. I fear, however, that they are compounding their error. They made the original mistake for two reasons. We have heard the first again tonight, from both the Minister and my hon. Friend the Member for Normanton (Mr. O'Brien). A caravan is not a chalet; it is a vehicle—a means of transport, like a boat. The 1988 Act confused residential sites, holiday sites and caravans that move from site to site, aand I am afraid that the Bill makes the same mistake. Unlike my hon. Friend the Member for Normanton, I do not want chalets to be included in the legislation. A chalet is a very different species; it is not a vehicle.
The second reason for the Government's mistake—which led to the flaws in the original legislation, to this Bill and to the flaws in it—is their wish to rush everything through. They would not allow hon. Members to make points such as this; they imposed guillotines, and rushed the legislation through the other place as well. Now they are in a mess.

Mr. Eric Martlew: My right hon. Friend has stressed that a caravan is a vehicle; but it is illegal to travel in a moving caravan. I am not sure that I agree that chalets should be excluded.

Mr. Oakes: I do not agree entirely with my hon. Friend about that. He says that a caravan is not a vehicle; it is a motor home. One can both live and travel in a motor home. That rests on a pitch, just as a caravan rests on a pitch. This is a difficult problem. That is why the Government, their advisers and the draftsmen have got it wrong. They do not understand what a caravan is.

Mr. Wiggin: I hate to interrupt the right hon. Gentleman, who is making a very good case. I am grateful for his support, but I must enlighten him by saying that, particularly in the case of boats, it is not a question of the boat; it is a question of the mooring and the site. That was the point that the hon. Member for Carlisle (Mr. Martlew) was trying to make. Boats and moorings were completely dealt with in the Rates Act 1984. However, the Government omitted them from the 1988 legislation. All I ask is that they should be included.

Mr. Oakes: I am complaining not about the 1984 legislation but about the 1988 legislation that the Government tried to rush through the House.
Why are we debating this Bill as if it were emergency legislation similar to the Prevention of Terrorism (Temporary Provisions) Act 1974? I realise that it is only a two-clause Bill, but why deal with all its stages in one night? It may be a minor matter that can be dealt with in that way. However, I submit that the Bill ought to be referred to a Second Reading Committee, where it could be properly debated. I fear that the Government will make the same mistake again; they do not recognise the difference between the pitch and the user of the pitch, be it for a boat or a caravan.
I recognise that, if someone lives permanently on a site in a caravan park, he or she ought to be subject to the community charge. I hate the community charge, but I understand the Government's logic. That is the main residence. However, as my hon. Friend the Member for Normanton said, the question is how often a holiday caravan is used: whether it remains on a certain pitch for, say, the summer and is then removed to the owner's garden.
What will be the position of the holiday caravan owner when it comes to non-domestic rating? The Government appear to be saying that they made an error by imposing the poll tax on holiday caravan owners, and that they are trying to put it right. I commend them for doing so. However, the Bill does not deal with the pitch and the occupant of the pitch.
I should declare an interest. I am a member of the council of the Caravan Club. It deals not with those who live in caravans but with those whose hobby, like mine, is to travel in caravans and have holidays in them. I declare that interest because we could be affected, in error, by the Bill. The Government do not want to hurt us, but I believe that they could.
The Caravan Club has a number of sites. Some of the sites are open all the year; most are open for only part of the year. Will the new legislation mean that they will be affected by the non-domestic rate, which, as the Minister said, will affect all other caravan sites? That is the least of the worries of the Caravan Club or of our sister club—it was once our rival, but in these days of glasnost and perestroika it is our sister clubx2014;the Caravan and Camping Club of Great Britain, which also has sites.
I am sorry to bore the House at this time of night, but this is important to us. Under the Caravan Sites Act 1968, caravans can use certificated locations. A certificated location is, for example, a farm, a pub or a vicarage, and it is allowed to take no more than five vans at any one time. Holiday vans can stay 21 or 30 days and must then move to another site. That enables someone to park a caravan or to pitch a tent.
That shows the difficulties in differentiating between caravans and tents. Some sites could be occupied by tents and some by caravans. The notes on clauses state that all other sites will be subject to non-domestic rates. Will a farmer or publican who allows his land to be used for £2 a night inadvertently find himself subject to non-domestic rates? If so, he will pack up and say, "I shall not pay non-domestic rates on this site."
Nearly a third of a million Caravan Club members and a considerable number of Caravan and Camping Club of Great Britain members use such sites for caravans and tents. Caravanning is the hobby of more than 750,000

people. If certificated locations have to pay non-domestic rates, they will pack up. Where will caravanners go? Every lay-by will be full of them, or they will have to give up their hobby. I do not think that that is the Government's intention, but I do not think they know what they are doing. That is their difficulty with the poll tax generally, but in the Bill they do not know what they are doing.
A farmer is allowed by legislation to permit someone to pitch a tent or park a caravan on his land for a certain number of days a year. He is even allowed to hold a rally of caravans and tents for a certain number of days a year. If all other sites are subject to non-domestic rates, he will not hold such rallies, and another source of pleasure for millions of people will be brought to an end by the legislation—not by design but be inadvertence.
Rather than having a debate at this late hour, a Second Reading Committee could have debated the Bill at length and in detail. I do not want to stay here and I am sure that neither do my hon. Friends. I am sure that the Minister does not want to stay here. I was a Minister for years and I know that he wants to get away and be done with the Bill as fast as he can. If he will give me an assurance that certificated locations—club sites and the sites of farmers who allow their land to be used for only a few days in the summer—will not be affected by the Bill or subject to non-domestic rates, I shall happily go home and let the Minister have his Bill in the knowledge that, at least on this tiny aspect of the poll tax, the Government have seen some sense.

Mr. David Mudd: I declare an interest as consultant to the British Holiday and Home Parks Association.
What I am about to say will probably give greater encouragement to the Opposition than to my hon. Friends. I welcome the Bill for two reasons. First, it shows yet again that the implications of the community charge legislation were so complex, and the decisions were reached so hastily, that the Department of the Environment and its Ministers did not appreciate everything that would come to pass. Secondly, I believe that the Bill proves yet again that the community charge legislation can be amended until that happy day when it is finally repealed.
When consultations were under way, before and during the passage of the Local Government Finance Act 1988, assurances were given to the holiday parks business that static leisure caravans would remain in rating and thus escape community charge. The owners, the industry, the park operators and the caravan manufacturers of Britain heaved a sigh of relief, because they realised that community charge liability in their sector would seriously undermine their future existence.
It seemed that all would be well until February this year, when the Department discovered to its discomfort that there were flaws in the legal interpretations on which it had based its reassurances. That was clearly a setback to its fulfilling its promise to keep static leisure caravans within rating.
It would be wrong at this stage to suggest that the Department should never have allowed itself to get into that position and, as the Bill is an attempt to remedy things, I will fight that temptation.
From February onwards, the Department went full speed astern to try to untangle the complex web in which it had entangled everybody, including itself. On 14 March this year—just two weeks before the implementation of the community charge—my right hon. Friend the Secretary of State for Wales, who was then Minister for Local Government and Inner Cities, told me:
We take a serious view of this problem and we regret that it has emerged so late in the day.
The seriousness of the problem was immediately recognised by the community charge campaign mounted jointly by the National Caravan Council and the British Holiday and Home Parks Association. The BHHPA reckoned that, until the promised return to the status quo could be achieved, more than 50 per cent. of its members' parks would be adversely affected. The extra burden on the parks industry would be crippling. It would cost owners at least another £200 per pitch per annum. Even worse, it would be immensely unfair to the owners of leisure caravans if different regulations could apply to neighbouring parks within the same area depending on the nature of the site licence that had been granted.
Urgent talks were held between the joint committee and the Parliamentary Under-Secretary of State for Transport, my hon. Friend the Member for Southampton, Itchen (Mr. Chope), who was then the junior local government Minister. My hon. Friend revealed his anxiety to resolve the problem as well as his seeming lack of comprehension as to how so disruptive and complex a contradiction of Government promises and undertakings could have arisen.

Mr. Brian Wilson: This is all very nostalgic. In Committee on the Local Government Finance Bill in 1988, these matters were dealt with in the greatest detail, and all the hazards to which the hon. Member is rightly referring were identified. It was the present Under-Secretary of State for Transport, the hon. Member for Southampton, Itchen (Mr. Cope), and the present Secretary of State for Employment, then the Minister for Water and Planning, who, with the utmost arrogance, denied the possibility of any such problems arising. Does the hon. Gentleman agree that this issue did not stand alone but was symptomatic of all the good objections to the poll tax which were raised then and which were brushed aside by arrogant individuals drunk on power but which are now coming home to roost?

Mr. Mudd: I feel that I have already been gracious enough to the Opposition without pursuing that line further—especially as I was about to pay tribute to the urgent action taken by my hon. Friend the Under-Secretary of State for Transport when he realised that things were going wrong.

Mr. John Maxton: My hon. Friend the Member for Cunninghame, North (Mr. Wilson) was not a Member when the Scottish poll tax Bill received its Second Reading and entered Standing Committee. I can assure him that all these issues were raised in Committee on that Bill, and English Ministers have no excuse for getting it so drastically wrong.

Mr. Mudd: The hon. Gentleman has made what he believes to be a fair observation. I want to restore fairness by paying tribute to the speed and urgency with which my hon. Friend the Member for Itchen reacted when he

realised that things were going wrong. Having acknowsledged that on 14 March, he was able to announce by 30 March his decision to introduce legislation to amend matters and to deliver that which had been promised so long before.
I welcome the Bill, but I hope that my hon. Friend the Minister can reassure me on one or two points. Clause 2 applies to Scotland and deletes existing provisions under section 15 of the Rating and Valuation (Amendment) (Scotland) Act 1984. That obviously opens the door for my right hon. Friend the Secretary of State for Scotland to introduce an order to enable caravan derating to be increased and extended to all static caravan holiday homes, including hire fleet units, retrospectively to 1 April 1990.
When my hon. Friend the Minister replies, I hope that he will confirm that my right hon. Friend the Secretary of State for Scotland will use his powers to enable the holiday parks business in Scotland to achieve urgent harmonisation and parity of value with England and Wales. Parity has not yet been achieved, and it is long overdue. I understand that my right hon. Friend the Secretary of State for Scotland intends to begin consultations on that important issue at some unspecified date. However, until confirmation of his intentions is given, the industry in Scotland will understandably feel and be extremely vulnerable.
In the meantime, I welcome a Bill that rectifies an administrative nightmare that should never have been allowed to arise in the first place. It eliminates community charge liability of between £300 and £500 for static holiday homes to a more acceptable level of between £90 and £120, in line with the uniform business rate. I welcome the Bill, as it will give a further boost to the amazingly successful caravan manufacturing industry in Britain, which can already meet 97 per cent. of the United Kingdom's demand for its products.

Mr. A. J. Beith: The Bill is yet another example of the mess and chaos that surround the poll tax and the measures by which the Government introduced it. The Bill is another criticism of the guillotine procedure used to carry through the legislation.
The Bill is based on the failure to understand what happens on caravan sites, most of which are a mixture of holiday and residential caravans. The furnished lettings and the tourist area have been affected by the mess and chaos. The holiday home and caravan industry has been affected, as has the bed and breakfast community. In the tourist industry—this is true of the caravan industry and the bed-and-breakfast community—people need to know by this time of the year what they will do next year. The bed-and-breakfast people, who normally advertise by this time of the year, still do not know how they will be affected by the rating and community charge system next summer. They therefore cannot advertise their services for next year.
Similar confusion has occurred with furnished lettings, since some community charge registration officers are treating the letting of a small number of furnished rooms as creating an additional standard charge in a property that will last in perpetuity. Someone who decides to let two


or three rooms for a short period has incurred, for the rest of his tenure of that property, a standard charge that he cannot extinguish when he ceases to let those rooms.
There have been similar problems with arrangements for service families and personnel. No doubt we shall have a succession of Bills of this kind if the Government are at all serious, even about the limited anomalies of the poll tax, let alone its fundamental weaknesses. Therefore, it is important that we get it right in this instance. Hon. Members who have mentioned specific difficulties will be at some disadvantage with the compressed procedures that we are likely to use to deal with the Bill.
I have tabled amendments, but they deal only with the points that I have identified, and other hon. Members did not have much time in which to table amendments. Indeed, on Thursday it was announced that we would not go through the remaining stages today, and amendments had to be tabled hastily when that decision was changed. I am grateful to the Chair for selecting amendments that had to be tabled on Friday, which was the first time that it was confirmed that the Bill would go through all its stages today.
This whole affair has presented serious problems for local authorities. Community charge officers did not know what to send out. Even a promise by the Government that they will legislate is not a sound basis on which to tax people. The normal procedure on which people are taxed is based on the law on the statute book, not vague promises that legislation might be brought in, delayed, amended, or might not come out in the form now proposed.
As it turns out, the Bill, which I welcome for what it does, is nevertheless a problem for several local authorities. I do not know how other hon. Members are affected, but Berwick borough council, for example, will lose £330,000 in revenue as a result of the change. I am talking about a small local authority—only about 26,000 people—and £16 in every individual's community charge.
The local authority, anticipating that difficulty, wrote to the Department indicating that there should be some form of compensation, whether directly or by way of some reassessment of the basis on which grant is paid to the local authority. The Department said that that will not be necessary, because it will all be evened out through the business rate to which caravans will be subject.
Of course, the business rate is not allocated on the same principle. The proceeds of business rate are allocated according to a population formula for the area, and the benefit that each charge payer in my constituency will get will be quite small. The Minister may care to give some estimate of what it is—the total additional revenue from caravan sites divided by the total number of people who provide the basis of the formula for redistributing the business rate. I imagine that it will be a relatively small amount—perhaps a pound or two per person—but at £16 per charge payer, which will be the burden on Berwick borough charge payers as a result of the change, will therefore obviously affect their poll tax level.
The issues that I wish to explore further by way of amendment particularly concern, for example, those people who have no home other than a caravan on a caravan site and are accepted as such by the community

charge registration officer who has registered them for personal community charge but who are treated by the site owners as not being permanent residents.
Ministers need to understand what happens on caravan sites. There are probably quite a few caravan sites on which there are more people living permanently than the site licences permit. That is not an unusual state of affairs, either because the site operators have not stuck closely to the original planning permission or to their site licences, because tenants have not been entirely clear about their intentions, or because tenants did not get a clear idea of what they were permitted to do when they originally bought a caravan at a certain site and may have been led to expect that they could stay there all the year round.
That produces a situation in which the site owner's view about who is a permanent resident is not necessarily the same as the community charge officer's view. I shall deal with the sort of argument that that leads to when we consider the amendments.
I am concerned also—it is the subject of another amendment—about how tenants are to know their proper rate liability for caravans. The Minister will no doubt help on that matter in Committee. It is important that we get the details right and that Ministers also understand the severe impact that the legislation will have on some local authorities with large numbers of caravans. That impact should be taken into account when Ministers assess the financial circumstances of those authorities.

Mr. Bill Walker: I declare an interest. Like my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), I am an adviser to the British Holiday and Home Parks Association, which is not surprising, considering the number of home parks in my constituency.
I welcome the Bill, which is important and necessary. I welcome also my hon. Friend the Member for Eastwood (Mr. Stewart) back to the Front Bench. I am confident that, with him looking after the Scottish end of these matters, and he and I collaborating, we shall achieve the same result that we have recently achieved on other matters that are controversial in Scotland.

Mr. Wilson: Does the hon. Gentleman mean the destruction and division in the Scottish Conservative party?

Mr. Walker: The hon. Gentleman should worry about his leadership problems and leave us to enjoy the delights of now having a stable relationship in the party, throughout Scotland and elsewhere.
My right hon. and hon. Friends on the Front Bench will not be surprised to learn that, down the years, I have had to deal with rating anomalies in many different forms. I have tabled private Member's legislation dealing with matters affecting caravan sites and caravans in Scotland because of the anomalies which, I am sorry to say, still exist in terms of valuations and other factors affecting us relative to the rest of the United Kingdom, and especially England and Wales.
We in Scotland are concerned that the consultations take on board the genuine fears of the Scottish site owners, who vividly remember how they were disadvantaged in the past. It was the efforts made by myself and others that levelled the playing field. My right hon. and hon. Friends


will also remember that during the passage of the Abolition of Domestic Rates Etc. (Scotland) Act 1987, which brought about the introduction of the community charge in Scotland, we debated those matters extensively and fully.
Fortunately for us, we thought that we had fully resolved the problems then, but it appears not. That comes as no surprise to me, because I have always believed that any form of local—taxation charges—or, indeed, any taxationmust constantly be open to amendment. That is the very nature of taxation. I am astonished that any Opposition Member should think that there is something odd about introducing such amendments. I remember spending nearly all my time on amendments to the rates, which had been in existence for a long time.
Therefore, I welcome the Bill and look forward to the discussions and consultations. I hope that my hon. Friend the Member for Eastwood will note that and that it will be me, among others, with whom he will be discussing the matter.

Mr. Jack Thompson: First, I declare an interest: I own a caravan on a site in the most beautiful part of north Yorkshire.
One problem that caravan owners face—I include all those on the same site as myself—is the fact that, over the past 12 months, there has been complete confusion about the payments. The owner of the site on which my caravan is located asked me to pay £85. I paid that sum, but in a letter the owner said that he was not sure whether the amount was accurate. I take his word for that, because he is an honest man who runs a good caravan site. As I said, it is in north Yorkshire. It is huge and very popular, and provides accommodation for day visitors, touring caravans, tents, chalets and fixed caravans such as mine, which is static and about 28 ft long. It cannot be moved without a trailer. There is therefore a mix of all types of holiday accommodation. The important aspect in terms of the Bill is that the site is open only on a seasonal basis, from March to October, so everyone is confined to that summer period, except for the people who work on the site, who are permanent residents in the chalets.
People can go for two days if they wish and those who, like me are on low incomes, can go for two weeks. Other people are free to spend virtually the whole season there—14, 15, 16 or 20 weeks. I am limited by my commitments to the House. Such flexibility should exist, and I am happy to pay my contribution for the caravan services provided on the site.
This year, several people with caravans on that site—my neighbours—decided that they would move. They decided to do so not because of the ground rent which, it is accepted, increases year by year because of the site improvements, but because they are unaware of and uncertain about the charges for the uniform business rate and the community charge. Therefore, caravan owners are disposing of their caravans and losing money on them. They are not getting the going rate, because people will not buy them when they are also uncertain about the community charge.
I am delighted that legislation is coming forward now, but it should have happened at least 12 months ago.

Mr. O'Brien: I am following my hon. Friend's speech closely. He said that the site covered a complex of holiday

homes. One would assume—perhaps my hon. Friend can explain—that planning permission for the site was for holiday homes, so the site is a commercial undertaking. Therefore, it should be embraced within the legislation as a commercial undertaking and the homes on the site should come under commercial rating, not poll tax rating.

Mr. Thompson: I agree with my hon. Friend. The site contains chalets that are occupied by some of its permanent employees for 12 months of the year. It is a huge site in North Yorkshire called Flamingo park. Other chalets and static caravans such as mine are temporarily occupied during the summer season. Touring caravans come on to the site for a few weeks and tents are pitched on the site for one or two weeks. There is a range of holiday facilities on that site. It is a commercial operation that should be based on the uniform business rate, without the present uncertainty.
Some of my friends who own caravans on the site are now saying that they will have to dispose of their caravans because they do not know what it will cost to keep them there next year and they are worried that they will not be able to afford the cost. People who use static caravans generally borrow £4,000 or £5,000 to buy them, and are running at the limit of their holiday budget. They are not people on high incomes who can buy or sell at a whim and dispose of the caravans as they wish. It is their only holiday facility, which they are now losing.
The problem has existed for 12 months and has now been aggravated, so that not only is the site owner having problems because sites are unoccupied, but people are trying to dispose of caravans that they cannot sell. The uncertainty means that people will not buy them. I know about only that one site, but the same problems must be occurring throughout the country. It is sad that the legislation, welcome as it is, is at least 12 months too late.

Mr. Peter Bottomley: I have no interest to declare. Many of my constituents are the sort of people whom the hon. Member for Wansbeck (Mr. Thompson) has just described. A year ago they thought that their position was plain; now uncertainty has crept in, and we should pay tribute to Government and Opposition spokesmen for giving the House an opportunity to make the position clear as soon as possible.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) raised a couple of interesting points, but I hope that they will not hold up the uncertainty of the greatest number.
I have been re-reading a biography of the great A. P. Herbert. If he were still here he would ask about houseboats, which are sometimes moored, sometimes used for boating and sometimes can be pulled up on to dry land. That might interest my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin), who spoke about the interests of people with boats.
I just hope that the Minister will not have to send one of his civil servants down to St. Helens in the Isle of Wight to go around the edge of Bembridge to see all those empty motor torpedo boats, sometimes on stilts, sometimes not, to determine their liability to the rating system when it comes. I hope that we can get the legislation through so that matters will be sorted out for many ordinary holiday makers, who will then be able to plan for the future.

Mr. Brian Wilson: It is worth noting that caravans were dealt with at great length in the Committee examining the local government legislation—some of my hon. Friends spent two days discussing it. When the great about-turn in the Conservative party comes, it will be interesting to go into the details of the names and constituencies of the Tory Members who sat on that Committee and nodded through every dot and comma of the legislation without listening to the objections which have been voiced tonight and will be voiced on future occasions.
We are in an interregnum. The hon. Member for Enfield, Southgate (Mr. Portillo) has been put into the job as a leading light of the No Turning Back group—and the St. Andrews set—to argue in support of the poll tax and all its works, as if it were a glorious enterprise to be defended to the last. It is hilarious to see the hon. Member for Eastwood (Mr. Stewart) alongside him in the Government. No one in the whole of Scotland, from Muckle Flugga to Machrihanish has been more unstinting in his defence of every aspect of the poll tax and its corollary, the standard community charge. I wonder what this squad will do in a few weeks' or months' time when they are told, in the immortal words of Mr. Ron Ziegler, then President Nixon's press secretary, that all previous statements are inoperable, and that the whole tax is and always has been a load of rubbish.
A new anomaly has been created tonight. Of course I welcome the fact that caravans are to be taken out of the standard community charge. No one but an idiot would have included them in the first place; the fact that they are included speaks for itself. The hon. Member for Southampton, Itchen (Mr. Chope) was mentioned earlier, but I shall not labour that point.
It is all very well that caravans are to be taken out of the charge, but some caravan second homes are handsome dwellings, in which a lot of money, labour and love have been invested. Some people, as a hobby, have devoted a great deal of time, effort and energy to turning them into little palaces, and I wish them well. I do not believe for a moment that these homes should be subjected to the idiocy of the standard community charge; but what is the logic of excluding second-home caravans that may be worth £15,000—for a good one—but continuing to impose the full majesty of the standard community charge on people on low incomes with, say, tiny flats in a coastal resort—flats that may be worth £2,000 or £3,000, with rateable values of £70 or £80?
Where is the logic in that? That question is rhetorical, because there is no logic. If it is possible for a caravan or a house to be a first home, then logically it is possible for a caravan or a house to be a second home.
I am not arguing against the concession that has been belatedly won for caravan owners. Anyone can see the absence of logic in imposing the standard community charge on a property that is part of a block of flats and which may have a tiny value and perhaps far fewer amenities than a caravan. I shall not labour the point, because it is self-evident. Sticking plaster is being applied all over the place. The Government have had to retreat because of the efforts of a pressure group and thousands of people on caravan sites. No doubt the Government will make a virtue of seeing the light three years after everyone

else saw it. What about the small flat with a value much lower than that of many a caravan? There will be no answer to that question.
The pernicious evil of the poll tax is perhaps seen as well in its close cousin, the standard community charge. The one thing that the poll tax cannot afford to allow in its name is any principle of ability to pay. That applies to the person of immense wealth and to the person of modest means, who both have to pay the same. Similarly, whether the second home is a castle or a tiny flat in my constituency with an outside toilet, the tenants of both must pay the same. That is the logic of the poll tax and the standard community charge.
In my constituency, and especially in the resort of Millport, where there is a tradition of hundreds of tiny flats, elderly people and those who have put their life savings, sometimes pittances, into small second homes have been forced to sell because rates bills of £70 or £80 have become standard community charges of £500 to £600. Those people have been forced to get rid of their tiny second homes in the same way as some people have had to get rid of caravans which were their pride and joy. My hon. Friends have spoken about that. Such damage has already been done by the people who imposed this madness on the country over the past two or three years.
What do the Government intend to do about the standard community charge as a whole, not just as it applies to caravans? They do not know, and neither do I, but in due course they will take their orders from the new Secretary of State for the Environment. When that happens, the Minister for Local Government and Inner Cities will become a member of the Rapidly Turning Back group. If he wants to hang on to his job, he will have to admit that everything that he has been defending, even in this debate, about the principle of the standard community charge has all along been a fraud.
We must not underestimate the human damage that has already been done by the maniacs who imposed this nonsense upon the country. That is nowhere more evident than in the workings of the standard community charge. We are anxious to exempt caravan dwellers and people who use them at weekends, and we therefore support the measure. Nobody should see the measure as a concession or as a sign of enlightenment. It is years late and it is a tiny concession on an issue that has been pointed out all along. It was made plain during the passage of Scottish legislation and during the passage of a Local Government Finance Bill that affected England and Wales. If the Minister has anything to say apart from engaging in a holding operation until someone tells him which way he is to jump and whether he may have to sacrifice his ideological background to hang on to his job, let him tell us his views on the principle of the standard community charge.

Mr. Eric Martlew: I am glad that Minister for Local Government and Inner Cities is to reply to the debate. When I last asked him to answer a question and to take a certain course of action, he was most obliging. I appreciated his response when he saved the Carlisle-Settle railway line.
I suspect that he will find it much easier to respond to my request this evening. I merely ask him to treat holiday chalets and caravans in the same way. A great deal of distress and annoyance has been caused to many of my


constituents who own caravans or chalets on the Solway coast. Many of the chalets are not worth £15,000 or £10,000, which are the values of some caravans. Many of them were built after the war, when soldiers received their demob money. Small communities would be formed on a field, with no water and no electricity. Each chalet is now worth only a few hundred pounds. Many of the chalets have been in the ownership of the same family for two generations.
Unfortunately, the Government have made it impossible for many families to keep their chalets. As they are worth only a few hundred pounds, they are not being sold on. Instead, they are being knocked down. That is a crime. Constituents asked me whether I could help, and I wrote to some of the Minister's predecessors. He has had so many that I have rather lost track. I wrote to a Minister on 27 May, and received a response on 27 July. It included an apology for the long delay but offered no solace to my constituents.
It makes no sense that chalets, which come within the terms of the Caravan Sites Act 1968, are classed differently from caravans. In the old days, local authorities used to say, in effect, "Yes, you have a caravan, so you must pay to have your dustbin emptied." They never classed them as residences then, although that would have meant extra income. It was stated in the letter of 27 July that the Minister has discretion.
Allerdale district council is controlled by the Conservative party and a few independents. It did not realise what it was doing when it set a standard rate of £298 for caravans. In lengthy correspondence, I have asked whether it will give an indication to those who own chalets what the poll tax will be next year.
The most recent letter that I received from chairman of the council, Mr. Conaway, which was in July, told me that the matter would go before the appropriate committee in October, when a decision would be taken. I telephoned the council at the end of November and was told that no decision had yet been taken that would bear on the chalets. That is an example of the Government leaving a local authority with discretion. I am not a Member who thinks that we in this place know better and that we should take decision-making from local authorities, and the Bill will remove discretion from the remit of local authorities.
The chalets that I am talking about are closed for four months of the year, so the poll tax charge that is levied on them is much higher per month of use than that on the property of someone who is a resident within the area that is covered by Allerdale district council. I am saying that chalets should be treated in the same way as caravans. They come within the legislation that applies to caravans, and they are cheaper than caravans. They do not have the excellent facilities that are available in some caravans.
I declare an interest, because I own a caravan. It is not an especially salubrious one, but it enables me to get away from this madhouse from time to time. It is great value for money. Why should I pay less for my summer caravan on the Solway coast than my neighbour pays for his chalet, which is worth less than my caravan? There is no sense in that. There is no sense in the poll tax.
The Government should today introduce a Bill to abolish the poll tax, not just for caravans and chalets but for everybody, and revert to the old rating system. They could then go to the electorate. Instead, they will tease them for a couple of years and say, "After the next election we will do something about the poll tax." I doubt whether

the Minister will agree to do anything about chalets, and I doubt whether the Conservative party will ever do anything other than tinker with the poll tax.

Mr. John Maxton: As this Bill applies to Scotland, I should like to say a few words—[Interruption.] I assure Conservative Members that it will be only a few words.
In the Scottish newspapers yesterday, there was considerable coverage of what may have been an inspired leak from the new Secretary of State for the Environment that his preference was for the abolition of the poll tax and a return to a rating system based upon the sale value of a house—[Laughter.] I do not understand why the Under-Secretary of State, the hon. Member for Eastwood (Mr. Stewart), is laughing. I am aware of the difficult position that he and others of his hon. Friends will be in when that happens.
We accept the Bill, which is a minor amendment to the poll tax. It should have been brought forward very much earlier. It does not remove the basic unfairnesses of the standard poll tax, which have been evident since its inception and which we raised both in the House and in Committee. For example, Her Majesty the Queen pays two standard community charges on Balmoral, while constituents in a small flat in Millport pay more than the Queen because they happen to be in a higher rated authority.
That is the basic unfairness of the standard community charge, which we have reiterated time and again, and now do so once more. Although we welcome the Bill, we look forward to the day when, bit by bit—as is happening with this Bill—properties are returned to the old rating system. I am sure that, eventually, all Conservative Members will come to the view that the rating system was not so bad after all.
I wish to question the financial effects of the Bill and its effect on public service manpower. The Bill provides:
The Bill will reduce authorities' income from standard community charges in both England and Wales and Scotland. In England and Wales the non-domestic rates payable to the Secretary of State will increase and thus the amount distributable by him to charging authorities.
Of course, it is not made clear that that amount will be considerably less than the amount that the local authorities will have paid. Who will make up the difference? The Bill then states:
In Scotland the non-domestic rates payable to local authorities will increase"—
but the amount of money being paid will be considerably reduced—
but they are required to repay half of the standard community charges paid in respect of caravans in respect of 1989–90.
Again, who will pick up the bill for that?
Ministers, especially the hon. Member for Eastwood, know that Scottish local authorities are already in dire financial difficulties because of the consequences of the poll tax. The simple fact is that 80 per cent. of those who have not paid their poll tax cannot afford to pay it. Regional authorities such as Strathclyde and district authorities such as Glasgow are facing enormous shortfalls. They are having to pay off staff, cut services and so on. The Bill may be minor, but it adds one more problem to those being faced by Scottish local authorities—unless the Minister gives a guarantee that central Government will make up


the difference. It does not say that in the financial memorandum, and I hope that the Minister will not try to imply that. The Government must make up that difference and not put another financial burden on local authorities.

Mr. Portillo: The hon. Member for Cunninghame, North (Mr. Wilson) described me a member of the St. Andrews set, which I am not. I hope that he will not mind if, none the less, I answer the points made about Scotland as well as those about England and Wales.
As to the question asked by the hon. Member for Glasgow, Cathcart (Mr. Maxton), when assessing the amount of the settlement that we make on local authorities, we do not take into account the income that they may have from standard charges, which is a bonus to them.
The hon. Member 'for Cathcart will recall that, in Scotland, static leisure caravans have remained in rating except when they are used as someone's sole or main residence. From 1 April 1989, when domestic rates were abolished in Scotland, residential caravans have either housed personal community charge payers or have been subject to the standard community charge where no one was solely or mainly resident in the caravans. There are only about 600 caravans in Scotland giving rise at any one time to the standard community charge, which means that the impact of the provisions will be minimal in terms of community charge income.
My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) asked about the derating of caravans in Scotland. To enable my right hon. Friend the Secretary of State for Scotland to take action to deal with the lack of harmonisation in caravan values in the 1990 revaluation, as a result of which Scottish values are much higher than for comparable caravans and pitches in England and Wales, he proposes to exercise his existing regulation making powers to increase the current 40 per cent. derating enjoyed by static leisure caravans, and to extend it to all caravans.
To enable that to be done, it will be necessary to repeal the existing provision that provides for the derating of only certain caravans. The Bill repeals that provision with effect from 1 April 1990. My right hon. Friend the Secretary of State for Scotland is currently collecting information on the extent of the discrepancy between the rateable values of caravans and caravan parks in Scotland and England and Wales. Until that information, and that provided by the caravan industry itself, has been analysed, my right hon. Friend will not be able to determine the level of derating necessary to achieve harmonisation. I am sure that both my hon. Friend the Member for Falmouth and Camborne and my hon. Friend the Member for Tayside, North (Mr. Walker), who has championed the cause of caravan owners and site owners in the past, will want to participate in the consultation process.
The hon. Member for Wansbeck (Mr. Thompson) and my hon. Friend the Member for Eltham (Mr. Bottomley) both welcomed the Bill, and want an end to uncertainty. That is what the Bill sets out to achieve. The hon. Member for Wansbeck was particularly concerned about multi-sites. Multi-use sites containing holiday caravan pitches, touring pitches, and pitches for tents and for chalets that

are let out for short periods of the kind that my hon. Friend mentioned will be subject to non-domestic rates, except to the extent that they contain accommodation used as a sole or main residence. If they are used for only part of the year, rateable value should of course reflect that
The hon. Member for Berwick-upon-Tweed (Mr. Beith) expressed concern about the decision taken by Berwick local authority to set its community charge in the expectation of there being standard community charge income. It is up to Berwick what view it takes, but it was always our intention to exclude caravans from the standard community charge, except where they were a sole or main residence—and I think that was made clear.
If the authority takes account of standard community charge income this year, it will have set a lower charge than it would otherwise have done. The local authority's charge payers would have benefited from that situation. At the end of the year, the authority will presumably find itself with a shortfall on the collection fund, so next year's charge will need to be higher to compensate. However, the benefit has been there for charge payers this year, when a lower charge was set because more income was anticipated. Therefore, the question of Government compensation does not arise.
The right hon. Member for Halton (Mr. Oakes) was concerned about touring sites. The sort of touring site that he was talking about may well have been liable to rates under the old rating system. If the use was limited to a few days a year, the rateable value would have been very low. Indeed, in many cases, where the use was casual and irregular, the site might not have been assessed at all if there were no permanent pitches.
Under the existing rating system, the position is the same. The Bill does not touch on sites of that kind, but relates only to protected sites—those containing one or more caravans which are licensed for year-round occupation. I hope that that is reassuring to him.
My hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) mentioned a different point—moorings for boats. I reiterate that we accept that there is a case for replicating in the new system the provisions of the Rates Act 1984 for the valuation officer to group together moorings as a single hereditament and give them a single value. There are good administrative reasons for adopting that approach. Where I part company with my hon. Friend is that I do not believe that the lack of that provision has led to the unfair treatment of any ratepayer, although I shall be interested to hear from my hon. Friend about any evidence to the contrary.
Having said that I do not think that any ratepayer has suffered, I repeat that we intend to make the change which he wants when there is a suitable opportunity, and I hope that my hon. Friend will accept that, although he feels strongly about the matter, it is a less urgent point than the question of caravans, as many holiday caravan owners are potentially subject to far higher charges than we had intended.
The hon. Member for Normanton (Mr. O'Brien), among others, mentioned chalets. Chalets are domestic and are therefore potentially liable to the standard community charge if they provide living accommodation, provided that the occupier has a sufficient interest in the chalet for the charge to be applicable. If the chalet is used for short-stay accommodation, and is let in such a way for more than 140 days a year, it will be non-domestic and will be liable to rates. Some chalets may be neither living


accommodation nor let for short periods. They would be liable neither to the standard charge nor to rates. If a chalet is subject to the standard charge but is also subject to a planning restriction limiting its use to part of the year only, a maximum standard charge multiplier of one applies.
Leaving all those important categories to one side, chalets which provide living accommodation are potentially liable to the standard charge and are akin to second homes, and it is reasonable that they should be treated accordingly.

Mr. O'Brien: The chalets at Skipsea that I referred to have no running water and no toilet facilities. They are simply places that someone can use for recreation, for limited periods of the year. How can the Minister describe them as domestic properties when they are as basic as a shelter? People have to provide their own chemical toilet and to obtain their own water. There are few facilities such as street lighting and main roads. Refuse is collected occasionally.

Mr. Portillo: It is not for me but for the valuation officer to say whether or not they are domestic properties. The hon. Gentleman does not necessarily have a good point when he mentions the non-provision of water, as that is not a local authority service paid for under the personal community charge, let alone under the standard community charge. If the accommodation is not domestic, it will not fall within the community charge, either standard or personal.

Mr. O'Brien: That is what I meant by asking for a definition of a domestic property. If there are no facilities such as running water or toilets in the property, how can they be described as domestic properties?

Mr. Portillo: I repeat that that is a matter for the valuation officers. However, a house with no running water is not necessarily uninhabitable: it cannot be ruled out of the domestic sector. The hon. Gentleman is using a piece of litmus paper which may not constitute the only appropriate test.

Mr. Martlew: Let us suppose that a chalet and a caravan are next to each other, under exactly the same conditions, on a site that is closed for four or five months of the year. How can the Minister say that one is subject to a standard rate, while the other will be subject to the new system? That does not make sense. It is entirely unfair, and the Minister should do something about it tonight.

Mr. Portillo: Let me return to something that I wanted to say to the hon. Member for Normanton. He quoted my hon. Friend the Member for Southampton, Itchen (Mr. Chope), implying that my hon. Friend had said that he would produce legislation covering chalets as well as caravans. May I remind the hon. Gentleman of what my hon. Friend said in Committee on 25 February 1988—and, in so doing, reply to the hon. Member for Carlisle (Mr. Martlew)? He said:
We have reconsidered the issue thoroughly and conclude that there is a sound a logical case for drawing a distinction between movable caravans, which are chattels and depreciating assets, and other second homes that are not movable. Although the generality of second homes must be treated as domestic properties, and it is only fair and proper that their owners or lessees should pay the standard charge, it

is more appropriate for caravan sites and pitches to remain in non-domestic rating."—[Official Report, Standing Committee E, 25 February 1988; c. 1031.]
I reiterate what was said then: a caravan is a chattel, and is not in itself subject to rating. It is the pitch on which it stands that is rateable, because it is non-domestic property. Like other rateable property, it is assessed on its notional annual rental value. The presence of a caravan on a pitch will contribute to its value. A chalet, on the other hand, is domestic property if it is living accommodation, and whether it is living accommodation is a question for the valuation officer to determine in each case.

Mr. Wilson: With all due respect, this is absurd. According to the explanatory and financial memorandum, clause 2 will, in relation to Scotland,
exclude caravans from the definition of 'domestic subjects'.
The Bill creates the differential between domestic subjects and caravans which are not to be domestic subjects.
The Minister has repeated the immortal prose of the hon. Member for Southampton, Itchen (Mr. Chope). How can he defend the logic of excluding a caravan worth £15,000 while including a chalet or flat worth £2,000?

Mr. Portillo: We do not seem to be able to shake the Opposition's belief that property values should be the universal determinant, but that is not the principle involved in the community charge.
The hon. Gentleman wants to know why second-homeowners who have caravans rather than cottages or flats escape the standard charge. The law as it stands attempts to make the distinction that he is trying to make, but it simply does not work. We have found no satisfactory alternative break point between holiday caravans and second homes. Rather than create a further set of problems—and because so few caravan second homes exist—we have decided not to make that distinction. We believe that there are only about 2,000 such caravans. The number is restricted by the limited supply; hence the high value of the pitches that are licensed for all-year occupation. There is a strong financial incentive to use such pitches for residential purposes.
I believe that the problem identified by the hon. Gentleman, although it may give him some heartache, is of limited application. The Government have tried to apply his preferred remedy, but have found that it does not work.

Mr. O'Brien: I thank the Minister for allowing me to intervene again. If the issue of holiday homes and part-time holiday homes is not resolved tonight, I foresee that in a few months we shall have to deal with another Bill to amend what we are amending tonight in this Bill.
I remind the Minister that, in columns 427 to 430 of the Official Reportof the proceedings in Standing Committee on 4 February 1988, it was said that the question of the boundaries between domestic and non-domestic property, on which now depends liability as between the community charge and rating, has not proved simple to resolve. The House of Commons Library research note states that the discussion in section C of the background paper should be referred to. Is the Minister saying that the division between domestic and non-domestic properties is a matter for the valuation officers and that it is their responsibility? If disputes arise, who will resolve them? Will it be possible to deal with them here, or will the Minister provide for a decision to be reached if there is a dispute over what are and what are not domestic properties?

Mr. Portillo: The hon. Gentleman will recognise that whatever laws we pass they have to be interpreted outside Parliament. We can draft general laws, but how they apply to different people and circumstances and, in this case, to different properties must be a matter of judgment, whether by the courts or by officers who are delegated to take the decision.
The hon. Gentleman implies that borderline problems arise uniquely under the community charge legislation. That is not so. There are difficult borderline cases in every taxation system. The best way to resolve them is to leave the decision to the valuation officers. If the parties are aggrieved, they can use the appeals procedure, or they can test the matter in the courts. That is the only way in which people out there can test what the laws mean that Parliament has passed and how they apply to different people in different circumstances.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Patnick.]

Further proceedings postponed, pursuant to order [29 November].

Orders of the Day — CARAVANS (STANDARD COMMUNITY CHARGE AND RATING) BILL [Money]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Caravans (Standard Community Charge and Rating) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums so payable under any other Act.—[Mr. Patnick.]

Orders of the Day — WAYS AND MEANS

CARAVANS (STANDARD COMMUNITY CHARGE AND RATING) BILL

Resolved,
That any Act resulting from the Caravans (Standard Community Charge and Rating) Bill may make provision with respect to the liability to non-domestic rates in respect of pitches for caravans.—[Mr. Patnick.]

Orders of the Day — Caravans (Standard Community Charge and Rating) Bill

Bill considered in Committee, pursuant to order [29 November.]

[SIR PAUL. DEAN in the Chair.]

Clause 1

CARAVANS IN ENGLAND AND WALES: STANDARD COMMUNITY CHARGES AND NON-DOMESTIC RATES

Mr. Alan Beith: I beg to move amendment No. 1, in page 2, line 21, at end insert—
'(7A) It shall be an offence for a caravan site owner, or any person acting on behalf of a site owner, deliberately to misrepresent to any site tenant the extent of that tenant's liability to non-domestic rates.'.
This rather hastily drafted amendment is designed to extract from the Minister an explanation of how tenants can have confidence in the apportionment that is made of the rates on a site as a whole. Bearing in mind the possibilities for misunderstanding, not to say tension and disagreement, which can arise on caravan sites, it is important to establish that tenants will not have to face an unchallengeable assertion by a site owner that that is their rates liability at a time when they may suspect that the total amount being collected from tenants exceeds the rates burden placed on the site as a whole and that the amount allocated to them does not fairly represent their share of the total burden. That causes tenants on site considerable anxiety. I hope that the Minister can clarify the position.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): I thank the hon. Member for Berwick-upon-Tweed (Mr. Beith) for the constructive way in which he spoke to the amendment. I share his concern that caravan owners should be protected from the attempts of site owners to pass on to them excessive charges under the guise of rates liability. As I shall explain, existing provisions should meet his concern.
For many years, it has been standard practice for a caravan site to be assessed for rating as a single entity, with liability falling on the site operator, rather than making a separate assessment of each caravan, with liability falling on the owner. The Non-Domestic Rating (Caravan Sites) Regulations 1990, which we shall extend to cover all caravan sites in non-domestic rating following the passage of the Bill, carry forward that practice into the new rating system. Whether the site owner can pass on an appropriate proportion of his rates bill to the owners of the caravans on site will depend on the terms of his agreement with them.
In making the new regulations, we took care to preserve an important safeguard of the caravan owner's interests. The regulations provide that when the valuation officer enters the value of a caravan site in the rating list, he must also, within a month, inform the site operator in writing of the number of caravans occupied by persons other than the site operator that are included in the assessment and what value is attributed to those caravans. The regulations


also provide that any of the caravan owners may, without charge, inspect a copy of the statement giving the information held by the valuation officer.
That means that the individual caravan owner can find out what the average rateable value of a non-residential caravan on the site is and what its rates liability would be were he to pay the rates himself. When the site owner asks for a contribution to rates, he will know what he should be paying, and if the amount seems excessive he can challenge it.
Those who occupy mobile homes as their sole or main residence and pay the personal community charge at that address are not liable for non-domestic rates. They may be required to contribute to the rates for any communal facilities on site that they use, but that would depend on the terms of their agreement with the site owner. It would be unusual for a site operator to attempt to pass on to mobile home residents any part of the non-domestic rate liability that derives from holiday caravans on the same site. Again, that would be governed by the agreement with the site operator.
The agreement that a residential or non-residential caravan owner has with the site operator is a legally enforceable contract. If it follows the format of the standard agreement issued by the trade association, which is widely used, it will contain a condition regarding the payment of rates, and if the site operator attempts to demand a charge for rates that the caravan owner knows to be improper or excessive he will be in breach of that agreement.
Civil law already provides proper remedies for such breaches of contract and I do not think that we need to make provision for a criminal offence further to the offence of obtaining property by deception, which is already contained in the Theft Act 1968. A deliberate misrepresentation of the amount payable in rates under such a model agreement could constitute an offence under section 15 of that Act.
I hope that the hon. Gentleman will be satisfied with that explanation and will not wish to press his amendment.

Mr. Beith: I am grateful to the Minister for his explanation, which goes some way to meeting my concern. I remain anxious about when a caravan owner challenges an apportionment, using as his basis the average for the site as a whole. He has been shrewd, has obtained the average for the site and says, "Why are you asking so much from me?" He is in a relatively weak position. If the agreement covers the point and is of the form described by the Minister, he could take the site owner to court for a breach of it, but I am aware of many tenants who have been unable to obtain a copy of their site agreement.
Let us suppose that the tenant has a copy. He must consider whether, as an owner of a caravan on a pretty low income, to take a large, perhaps multi-site owner, to court on a difficult point of law. I cannot think of many caravan owners who would consider themselves in a position to do that. I submit to the Minister that tenants are in rather a weak position when it comes to defending their rights and could well find themselves landed with unreasonable levels of charge, with no adequate means of enforcement.
I know that the creation of new criminal offences is not an activity in which one wishes readily to indulge. The law is complicated enough as it is. Nevertheless, I ask the Minister to consider the matter carefully in the light of the slightly changed circumstances that will result from the

Bill, to assess whether there is adequate protection for tenants. It is reasonable that tenants should look to the Government, as the authors of the system as a whole—whatever criticisms we may have of it—to ensure that it is not abused so that it becomes even more burdensome because unreasonable sums are charged without adequate recourse. I ask the Minister to examine carefully how the provisions work.
As it appears that the Minister is willing to do that, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Beith: I beg to move amendment No. 2, in page 2, line 21, at end insert—
'(7B) No person who has registered for a personal community charge in respect of their residence in a caravan shall be liable to make any contribution to non-domestic rates in respect of the same caravan, at the same site, in the same yea r.' 
This amendment deals with a more complex matter, which is very important to those who are affected. It is designed to ensure that nobody who has paid a personal community charge or has been registered as liable for one shall be rendered liable to pay non-domestic rates in respect of the same caravan.
I have found it necessary to table the amendment because of the confusion—which I described earlier—on sites as to who is and who is not permitted to be a permanent resident having no other home. Circumstances can arise—they have certainly arisen in my constituency—in which there are more people on a caravan site whose only home is a caravan or a mobile home than the site operators licence permits or than the site operator is prepared to admit.
Such circumstances may arise for a number of reasons. A site operator may have taken on more permanent residents than his licence permits or it may have been unclear, when someone bought a caravan or mobile home, whether he was allowed to be a permanent resident. For whatever reason, a site owner may not wish to treat a caravan resident or group of caravan residents as a permanent resident or residents with no other home and may wish to ignore the view of the community charge officer that that is what they are.
A specific case has arisen, affecting a number of tenants at the Haggerston Castle holiday park outside Berwick-upon-Tweed. A notice issued by Bourne Leisure Group Ltd., which uses that caravan park, said:
Holiday caravans on holiday caravan parks are controlled by the relevant planning permission and their Site Licence to be used for holidays and recreational purposes only and therefore, no registration of a holiday caravan for the Community Charge (Poll Tax) is permissible …. Accordingly, any registration for the Community Charge of a caravan on a holiday caravan park will be a breach of this agreement and the caravan will be disconnected and have to leave the park.
That represented a direct threat from the site owners to the tenants, saying that, if any tenant who registers—as he is legally obliged to register—the fact that he has no other permanent home, his caravan will be disconnected and removed from the park. It is a direct threat to someone carrying out a legal obligation to identify his permanent home.
I wrote to the then Minister about this issue, and he replied:
Even though the terms of Haggerston Castle's site licence may be restricted to holiday and recreational purposes"—
which, incidentally, they are not entirely—


where a person considers that he might nonetheless be subject to a charge he must comply with the community charge regulations. For the purposes of the personal community charge, the status of the caravan—whether or not it counts as domestic property—is irrelevant; what is at issue is whether the person is solely or mainly resident in that place. It would be more appropriate for Haggerston Castle to frame its notice in the terms of what use of their caravans is acceptable under the terms of the agreement with the individual, rather than to suggest that a person may not inform the local authority if he thinks he subject to the charge.
Naturally I drew the attention of the tenants and the site operators to the Minister's views, but that was not sufficient. The community charge registration officer had to write to the site operators saying:
It has come to my notice that you are sending out misleading literature to persons registered for the personal community charge. I quote an extract from a letter sent to one of your clients. 'This states that the caravan is for holiday and recreational purposes only. You have not been offered residential status, therefore the rates are legally due.'
12 midnight
The site owner told the tenant that, because he did not recognise the tenant as having residential status, he had to pay rates to the site owner as well as paying the personal community charge to the local authority. The registration officer went to some lengths to state:
Any person who considers that their caravan or chalet is their sole or main residence, has a statutory duty to register for the personal community charge whether the property they occupy has a residential licence or is for holiday and recreational purposes only.
He stressed that the site owners should give more correct advice to their tenants.
However, that was not enough. The community charge registration officer had occasion to write to the site operators again. He wrote:
I am still rather dismayed that you have been charging rates to persons registered for the community charge, when I have advised you to the contrary and where regulations and advice given to me from the Department of the Environment, clearly states that rates will not be paid on a property where someone is registered for the community charge, irrespective if that property is a caravan, on a protected site or on a holiday site.
The correspondence continued, with the community charge officer trying to insist that the site operators should not seek to claim rates from tenants when those tenants had already paid, or were liable to pay, community charge.
I am not satisfied that this legislation has solved the problem. I am concerned that many of those tenants who have other anxieties about their future security on the site, will remain very worried that they will have to continue to pay the personal community charge because they are legally obliged to do so and they will also have to pay rates to the site owner because he can extract the money from them. They cannot do very much to protect themselves.
I have already said that, even where there is a simple dispute about the level of rate, those tenants are not in a strong position. However, in the case that I have described, they received demands for contributions to local government from two different sources, each of which claimed to be 'valid—one with the authority of the community charge registration officer and the other from the site owner on whom they were dependent for services.

If they continued to give correct information to the council offices, there was the threat that their caravans would be disconnected and towed away.
The Minister must understand how dreadful that is, not just for people with a second home, but for people whose only home is that caravan or mobile home, and who rightly or wrongly have nowhere else to go and, in many cases, had take up residence on the site under the impression that they were allowed to do so by the planning permission and that there was no other reason why they should not regard themselves as permanent residents. Their permanent residence had not been challenged until the poll tax came along. That is so unsatisfactory that I hope that the Minister can give us clear assurances about it.

Mr. Portillo: I understand the concern of the hon. Member for Berwick-upon-Tweed (Mr. Beith) that people living in mobile homes should not be required to pay both the personal community charge and non-domestic rates in respect of their homes. The Local Government Finance Act 1988 clearly provides that, on any given day, a property must be either domestic or non-domestic. A person cannot be liable under both systems on the same day, although he could be liable to different charges at different times in the year.
The treatment of rates liability under the 1988 Act broadly reflects the position under the old rating system. In general, under the terms of the Non-Domestic Rating (Caravan Sites) Regulations 1990, the owners of non-residential caravans are not personally liable for non-domestic rates. Instead, the caravan site is treated as a single property with a single rateable value, and the site operator is liable for all non-domestic rates. Any residential caravans on a site that are occupied as a sole or main residence will of course be left out of the assessment, because they will be domestic and therefore not rateable.

Mr. Beith: Will the Minister give way?

Mr. Portillo: I shall refer to the hon. Gentleman's point.
On a site which has residential and non-residential caravans, the rates bill may have two elements. One will be the amount attributable to holiday caravans, and the second might be any amount attributable to any other non-domestic property on the site—for instance, communal facilities such as a launderette or games room.
How the site operator meets the cost of his rates bill and the extent to which he passes it on to caravan owners will be a matter for him to consider in the light of his agreement with caravan owners. He may in some circumstances share the rating costs associated with communal facilities across all caravans, residential and non-residential alike. That might be perfectly reasonable if they all benefited from the use of the facilities. However, as I have said, it would be improper for him to try to impose on mobile home residents any part of the rate liability attaching to holiday caravans on the same site.
I must agree with the hon. Gentleman that there is a possible difficulty on sites where the number of residential caravans exceeds the number permitted by the licence. The residents of those caravans will be liable to the personal community charge, and quite rightly so. The assessment of the non-domestic extent of the caravan site will be a matter for the valuation officer and will reflect the particular local circumstances. I would expect him to take account of the number of caravans permitted by the licence for residential


use and the number of caravans that are actually being so used in forming a view on the level of the non-domestic assessment of the site.
Enforcement of the site licence conditions is a matter for the local authority, not for the valuation officer. The valuation officer, however, in valuing a site takes into account the rent that a hypothetical tenant would pay for it if it were vacant and to let. In the light of that consideration the legal limit on the number of permanent residents would govern the amount of the assessment as a hypothetical tenant would be bound to take into account the likelihood of the local authority enforcing the conditions of the site licence.
In other words, I believe that the law is fairly clear. The hon. Gentleman seemed to imply that, by saying that the community charge registration officer had written to the people involved making it clear that not only was it his view that the community charge was due from those persons' non-domestic rate but that that view had been backed up by the Department of the Environment.
I fear that the hon. Gentleman, in trying to go further, even though the law is clear, is putting forward an amendment which goes too far because it would prevent a site operator from seeking to recover that part of his rates bill which relates to any communal facilities. It might be legitimate for the site owner to do that if the agreement allowed him to do so. I can see the argument for the amendment to the extent that it would prevent a site owner imposing on residents that part of his rate bill which relates to holiday caravans; however, I do not think that an additional statutory provision is needed to achieve that. Residents' proper protection lies in enforcing the terms of their agreements if necessary through the courts.
To end on a positive point, the law is clear, but we are certainly ready to do our part when the Bill is enacted, by writing to the trade associations to offer our guidance to their members on the proper treatment and attribution of non-domestic rates liability under the legislation. I hope that that may be of some considerable assistance to caravan owners in enforcing their rights against site owners. I hope also that that will be a valuable reassurance to the hon. Gentleman.

Mr. Beith: I am grateful to the Minister for underlining what I take to be the law as it stands and for his willingness to write to trade associations to try to ensure that all site owners know what their position is. There remain some anxieties, but I hope that they will be met by the terms of the Minister's letter, asking them, for example, to envisage what would happen when the valuation officer has duly taken account of the terms of the planning permission and the site licence and has told the site owner that there are only 30, say, permitted permanent residents, although about 40 or 50 people point out that they are registered for the community charge and have no other home.
At that point, the site owner may say, "It is not my fault. More people are claiming to be permanent residents than I have ever permitted or the site licence permits. I am entitled to reclaim my rates from them." According to the Minister, the site owner is not entitled to reclaim rates from those who have been registered for the community charge, except any rates in respect of communal facilities, which were not covered by my amendment. I accept that that is a separate point, which must be dealt with in some way.
I am never reassured when the Minister refers to the site agreement as the basis on which the tenant can solve his problems because such agreements are often difficult to obtain and are frequently written in such a way as to make the tenant's position weak. Therefore, I hope that the guidance issued by the Department will be strong enough to remind site owners that when someone has been registered for the personal community charge, that person cannot be liable for rates other than those for communal facilities, in respect of the same caravan on the same site. That needs to be firmly underlined, and I shall take every opportunity to remind tenants in my constituency that that is the law.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause I ordered to stand part of the Bill.

Clause 2

CARAVANS IN SCOTLAND: STANDARD COMMUNITY CHARGES AND NON-DOMESTIC RATES

Motion made, and Question proposed, That the clause stand part of the Bill.

Mr. Beith: I have only a small point to make about clause 2, which provides for retrospective provision and for repayments to be made, in relation to Scotland. How will those entitled to repayments know that they can make a claim for repayment? It seems likely that quite a large number of people will not realise that that money is due to them and will not be aware of the procedure, especially the closing date after which no repayment will be available to them.
It is important that the publicity should be widespread well in advance of that closing date. What steps are to be taken to ensure that those who are eligible for a refund, which in some cases will be substantial, will know that in good time and will therefore be able to claim it?

Mr. Portillo: My right hon. Friends' plan is that they will write to the trade associations—or perhaps I will—letting them know about their entitlements and the procedures that they will follow. I am sure that the trade associations can be relied upon to circulate to their members full details of how claims can be made and the cut-off dates.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Bill reported, without amendment.

Order for Third Reading read.—[Queen's consent on behalf of the Crown signified.]

Motion made, and Question proposed, That the Bill be now read the Third time.

Mr. Beith: The briefest of intervals between Committee, Report and Third Reading has enabled me to look again at the point about which I was asking the Minister a question a moment ago in relation to clause 2 stand part. I am not entirely satisfied with his answer. We are concerned not only with site owners, but with individual tenants who may have paid a standard community charge and therefore be entitled to a refund. I am concerned about making information available to those people.
This seems to be the opportunity for the hon. Member for Eastwood (Mr. Stewart) to make his debut on his return to the Government Front Bench, because I am thinking especially about those who have paid the standard charge in Scotland, who will be entitled to a refund but who may not know that and who will have to apply—in some cases, their executors may have to apply—by 30 September 1991 or lose the opportunity of a refund.
I foresee many aggrieved people in Scotland, and a few people in England with caravans in Scotland, discovering after 30 September 1991, that they have been denied the opportunity of a refund. Unless people are generally made aware of the provision, many Members will receive letters asking if there is any way in which the date can be extended, which they will send on to Ministers.

Mr. Portillo: In the vast majority of cases, standard community charges have not been collected by local authorities and so the problem is not widespread, but one wants to deal with it nonetheless. I believe that, as a matter of good administration, one should have dates on which various files can be closed, and there should be some sensible cut-off date.
As I said before, in relation to making sure that trade associations are aware, I believe that many people who own caravans or mobile homes will be members of associations which have newsletters, which is where we should like such information to appear. We shall also take great care to ensure that, in the caravan and mobile home press, to which many of those involved will subscribe, information will be given about their rights and the closing date for applications. It was always a problem to know how to reach all of a target audience, but the most we can do is to contact all the associations, with the hope of influencing their newsletters and the specialist press, which such people are likely to read.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.).

MINISTERIAL AND OTHER SALARIES

That the draft Ministerial and other Salaries Order 1990, which was laid before this House on 13th November, be approved.—[Mr. Patnick.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.).

MARINE POLLUTION

That the draft Merchant Shipping (Prevention and Control of Pollution) Order 1990, which was laid before this House on 12th November, be approved.—[Mr. Patnick.]

Question agreed to.

Orders of the Day — Concessionary Television Licences

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]

Mr. Richard Holt: I last spoke in the House of Commons on the issue of concessionary television licences on 19 May 1989. I am not the first person to speak on the subject and, until the Government do away with paying for the BBC through a licensing system, I doubt that I shall be the last.
I wish to draw attention to the situation in Teesside at present, consequent on regulations introduced by the Government a short time ago. I wonder how the average person would feel if he was to receive an official communication from the National TV Licence Records Office, which reads as follows:
Dear Mrs. Littlefair,
Thank you for your recent letter.
I have checked our records concerning the Accommodation for Residential Care concessionary licence for the premises you occupy and confirm that your name is listed on that licence. Therefore, there is no need for you to obtain a full fee licence.
The letter resulted in a delighted Mrs. Littlefair until someone realised that a mistake had been made and Mrs. Littlefair was told that the concession was withdrawn.
Did Mrs. Littlefair make the mistake? Was she her own enemy? No, because it was not up to her to make the application, which had to be made by Middlesbrough borough council housing department. Did it do so? Yes, it put in an application for a large number of people in Middlesbrough in February 1987, and it became clear that the department made a mistake when submitting it. Therefore, the relevant authorities received the faulty documentation in 1987. What did they do about it? They waited until it was too late to have it put right—14 months later—before apprising Middlesbrough borough council of the position. Mrs. Littlefair did not make a mistake; the council did—but it made it 14 months earlier. Then Mrs. Littlefair and the other residents of the Easterside estate in my constituency were disbarred from concessionary licences.
The heinous crime of the local authority was having put in a computer printout that quite properly listed the names of all the people, and their addresses, who were entitled to concessionary licences—all but four or six of them. At the time, their names had not been fully entered. I am glad to see that the Minister has a copy of the printout, which contains a handwritten annotation to the effect that those four or six properties would be added as soon as possible. They were added, one month later, but the Government now rigidly maintain that those people did not meet the deadline stipulated in the 1988 regulations. So poor Mrs. Littlefair and her neighbours have lost concessionary television licences for ever, because of a mistake that was not recognised or rectified.
I came across the case accidentally when the son-in-law of Mrs. Littlefair brought it to my attention. I discovered that she was not the only victim of this bureaucratic nonsense: it has happened all over Teesside. I am glad to see the hon. Member for Middlesbrough (Mr. Bell) here. He knows what is happening in our area.
Langbaurgh is the other half of my constituency. There is a two-page printout of people in Langbaurgh who have been disqualified because of computer errors. A computer


makes an error, so an elderly person is deprived of the concessionary licence that his When first I raised the matter with Langbaurgh council, hundreds of people were in the same situation, but gradually the numbers have been whittled down. I am sure that the hon. Member for Redcar (Ms. Mowlam) will say a few words shortly about the exact figures for the whole area.
People who are entitled to concessionary television licences and have done no wrong should be told that the Government did not intend to disqualify them for this sort of mistake. We have had apologies, but apologies from the Minister do not help the people who will have to pay the full £71 licence fee. Sometimes the Government even make a concession. On 20 August I received a letter informing me that my constituents, Mr. and Mrs. Knight, qualify because their tenancy commenced in 1986:
We believe that they will get the concession. Once we have heard, we will let you know.
It is now nearly Christmas and my constituents still have not heard. Fourteen months, six months, apologies, but all the time innocent people are losing the benefits to which they should be entitled.
One apology states that the matter will cause deep disappointment. It will not; it will cause deep resentment, which is a different thing altogether. No Government should treat people in that way if they have made no error themselves. Much of the problem is due to the 1988 regulations, a nonsensical measure that set neighbour against neighbour and family against family. A lady of 58 was married to a gentleman in his late 60s who died. They had a concessionary licence when he died and his widow was allowed to continue to have it. But because any newcomer is under 60, she is disqualified from having the concessionary licence, as that complex of old people's accommodation is outside the scope of the regulations. Is that what everyone wants, and is it what was intended?
The widow's 84-year-old mum moved from one of the estates because she was getting a little frail and took up residence in one of the other houses in the accommodation. She is not entitled to the concession, even though she is 84. However, her daughter, who is only 58, is entitled to keep the concession. Such nonsense does not make for good government.
The Government will have to make a change. I know my hon. Friend the Minister very well. He is in the position that many Ministers have been in of defending the indefensible. Only a few months ago, the House was told by a Minister that the Government could not give additional pensions to war widows before a given date. There was pressure in the House and within a few weeks a Minister said, "We have found the money." There was a chorus of hallelujah. It can be done because, if there is a will, there is a way.
The Minister may say that a change requires primary legislation. I have been here for two and a half hours listening to a debate that arose because the Government cocked up and had to put matters right by introducing primary legislation. They could do the same with the 1988 regulations.
Because of my interest in the subject, a little piece of paper from a housing association floated on to my desk. It is a letter about satellite television and I shall read part of it:
The film channel is one for which the hire or purchase of a decoder would be necessary. Once the rules on franchising are relaxed on 1 January 1991, Telefusion will offer the Trust the addition of 4 channels of Sky Television. The cost would

be an extra 54p on the service charge. For Assured Tenants this would be at the annual rent increase, and for Secured Tenants when the rent is next registered after the completion of the work. This will be eligible for Housing Benefit. Anyone on Housing Benefit, therefore, will receive the service free of charge.
Any minute now, all old people in accommodation in which satellite television is available will be able to have it beamed in and paid for out of housing benefit. I bet that the Government have not thought that one through, any more than they thought through any of the matters that cause all the trouble over concessionary licences.
There is only one way to deal with the problem and it is to abolish the licence. The more it is tinkered with, the more anomalies will arise. The time has come for the Government to stop Back Benchers such as me from moaning about an issue that is as indefensible as their stance on pensions for war widows. It is time for action. My hon. Friend the Minister will say that within the regulations he can do nothing. He can get the regulations changed.

Ms. Marjorie Mowlam: I thank the hon. Member for Langbaurgh (Mr. Holt) for giving me a chance to participate in the debate. We do not agree on much, and I am pleased that this evening we agree on the issue that he has raised. I am sure that he will maintain pressure on the Minister, as I will. The issue will not go away. If the Minister wants to deal with it, he can do so, as the hon. Member for Langbaurgh said, in a clear and positive way. If he does not want late-night debates and does not want to be harried on the issue, that is what he should do. Given the injustice and the downright stupidity of the present situation, we shall maintain our pressure on the Minister.
As the hon. Member for Langbaurgh said, it is necessary to think things through. We are not interested in apportioning blame. As has been said, a computer fault created the anomaly to which the hon. Gentleman drew attention. As a result, individuals are being discriminated against, unfairly and unjustly. We could take the time of the House to refer to many of the examples that we have to hand, but I shall quote only one. Mrs. Cross, of Shinwell crescent, Southbank, moved into sheltered accommodation in October 1987. It is within the Government's definition of sheltered. There is a resident warden, not a mobile, visiting warden. She became an old-age pensioner on 30 January 1988. She has been denied a concessionary licence because of a computer error, which led to "Not OAP" instead of "OAP" appearing in the final column of the relevant document.
Like many others, Mrs. Cross feels strongly that the Government, by what they are doing, are waiting for her and others to die. It is as crude as that. As the relevant provision applies before May 1988 and not afterwards, the problem will eventually disappear, because those concerned will no longer be with us. If that is how we plan to treat people who have served this country, as many of the pensioners who come to see the hon. Member for Langbaurgh and I would say, we should be ashamed of ourselves. That is not the way in which such people should be treated in their twilight years, but that is exactly what the Government are doing.
As the hon. Member for Langbaurgh said, the basic problem is the nature of the relevant legislation as it found


its way on to the statute book. It is discriminatory legislation and it will not work. The outcome is appalling for many pensioners on Teesside.
The solution is simple. Primary legislation could be introduced quickly to achieve the end that we want. We can assure the Minister that if parliamentary time is not made available we shall take other routes and adopt other courses of action. We shall place the matter before the ombudsman and keep the issue on the political agenda. A rational, humane and sane decision from the Minister this evening would save much Government time, a great deal of taxpayers' money and a considerable amount of heartache and suffering for many of the residents of Teesside. I hope that the Minister will make the necessary effort this evening.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Peter Lloyd): I congratulate my hon. Friend the Member for Langbaurgh (Mr. Holt) on securing this Adjournment debate. I know that the subject of concessionary television licences is one to which he has given much thought, not least because of the unhappy experience of his constituent, Mrs. Littlefair. He has fought with his characteristic tenacity and vigour against the injustice to which he believes that she has been subjected. He has taken the opportunity this evening, as he did during the most recent Home Office questions on 15 November, to ask about Mrs. Littlefair and her Dunbar avenue neighbours.
I realise from my hon. Friend's frequent representations that the Government's general position must be well known to him. He gave some indication of that this evening. That means that there is nothing very fresh for me to say. I apologise if once again I go over ground that is rather familiar.
I noted what the hon. Member for Redcar (Ms. Mowlam) had to say during her short "harry" about concessionary television licences in general and about the position of one of her constituents. I am not familiar with the details of the case to which she referred and I shall acquaint myself with it after the debate. It seems from what the hon. Lady said that it was another instance of a constituent who might have been entitled to a concessionary licence under the rules as they existed previously, that for some reason an application had not been made and, therefore, the lady did, not have a concessionary licence.
It would be sensible to set the issue in context. To do that I must recount briefly the history of the scheme and the background to the changes that we were forced to make to the regulations in 1988 as a result of the Kirklees judgment. The concessionary scheme had existed in much the same form for the preceding 20 years. It was intended to benefit pensioners and, latterly, disabled people living in residential homes or comparable sheltered housing provided by a local authority or a housing association. That aim had been endorsed by successive Governments, whatever their political persuasion.
However, the Kirklees judgment changed all that. One of three tests for eligibility under the regulations was whether a common facility was provided for all the residents. The effect of the Kirklees judgment was not only

to widen that part of the definition but to call into question the scope of the other two tests—that the accommodation must form groups and be specially provided for retirement pensioners or disabled people. The judgment thus undermined the long-standing principle of the scheme, and opened the way for its extension to large numbers of people in mainstream housing. That was never the intention. The whole basis of the scheme was therefore on the point of breaking down, while the BBC faced the prospect of a considerable loss of revenue.
We could, of course, have solved the problem by abolishing the scheme—a possibility to which my hon. Friend referred. But we did not want to take away a long-standing concession that had benefited many people.

Mr. Holt: With respect to my hon. Friend, I am sure that, when he checks Hansard, he will find that I did not say that I wanted to do away with the concession. I said that I wanted to do away with the licence.

Mr. Lloyd: I admit that I did not think that it fitted in with the general tenor of my hon. Friend's speech to suggest that the only way to deal with the anomalies was to abolish the scheme. I accept his correction, which makes logic of his argument.
After long and careful consideration, we concluded that the most sensible thing to do was to restore the underlying intention of the scheme. To give effect to that decision, we introduced new regulations which defined more closely the type of sheltered accommodation which would qualify in future. The regulations came into force on 19 May 1988. Under the new regulations, qualifying accommmodation had to form part of a group of at least four dwellings within a common and exclusive boundary, and be served by a full-time or resident warden, so that the accommodation could be seen to form a cohesive, self-contained unit with appropriate care staff to hand, just like a residential home.

Mr. Gary Waller: My hon. Friend will be aware that, in an estate of essentially sheltered accommodation of perhaps 50 dwellings, new arrivals can be disqualified from benefiting from the concessionary licence merely because one or two dwellings are occupied by persons who are not entitled to the usual benefits associated with sheltered accommodation. That is hardly fair.

Mr. Lloyd: The concession is for accommodation for those of retirement age. My hon. Friend the Member for Langbaurgh referred to this point. A scheme would not necessarily be excluded by one under-age occupant if that scheme was provided with the intention of being eligible only for certain categories of people. Therefore, the example mentioned by my hon. Friend the Member for Keighley (Mr. Waller) would not necessarily exclude others in the scheme from enjoying the benefits of it. It is necessary for local authorities to organise their warden-controlled units so that they are for those of retirement age, or otherwise they put the concession in jeopardy.
The tenor of the speech of my hon. Friend the Member for Langbaurgh was to question why the scheme was not more flexible. In a statutory scheme, which this is, a clear line must be drawn between accommodation that qualifies and that which does not. As the Kirklees judgment signally demonstrated, failure to do that is a recipe for anomaly


and invites challenge. We had to provide a formula which was legally coherent and which could be sustained in court.
We recognised that changing the scheme in the way we did could mean that many people who had benefited previously would cease to qualify. We therefore included a provision in the 1988 regulations that preserved the right to existing beneficiaries for their lifetime, provided that they continued to live in accommodation that would have qualified under the old regulations. Consequently, in some schemes residents continue to enjoy the benefit of the concessionary licence, even though the scheme itself no longer qualifies. However, that can apply only to residents who had the concession before the new regulations came into force on 19 May 1988.
People who moved into such schemes after that date cannot obtain the concession unless, of course, they have preserved rights from their previous accommodation. Thus, neighbours in the same non-qualifying scheme may sometimes be treated differently, with existing beneficiaries continuing to enjoy a concession that newcomers cannot enjoy. That, however, is an inevitable consequence of the saving provision in the regulations, and our determination not to take the concession away from someone who already had it.

Ms. Mowlam: Will the Minister give way?

Mr. Lloyd: If the hon. Lady will forgive me, I will not, because time is creeping on. If I have a moment at the end, I shall certainly do so.
The redrawing of the regulations also meant, of course, that some pensioners living in accommodation which might have qualified under the old regulations, and who had not yet applied for the concession—for whatever reason—ceased to be eligible. But, once the regulations had changed, we could no longer deal with new applications under the old regulations. To have done so would, of course, have undermined the purpose of the new regulations.
However, provided that an application had been submitted before the regulations changed, we were still able to consider it under the old regulations, although—because of pressure of work at the National Television Licence Records Office—it often took some time to process. Over the transitionary period, therefore, the date of application became a crucial factor, and many councils and individuals sought to argue that they had applied before the regulations changed. Provided that they could substantiate that claim, we were quite ready to judge their case under the 1984 rules.
The case of Mrs. Littlefair and the other residents of Dunbar avenue to which my hon. Friend has referred is a case in point. I can imagine Mrs. Littlefair's feelings, and understand why my hon. Friend has taken the trouble to present her case afresh. There is no doubt that she was resident in Dunbar avenue before the regulations changed, and that, once her home had been connected to the mobile warden system, the address would have qualified under the old regulations.
However, the issue here is whether an application for the concessionary licence was made prior to 19 May 1988. This hinges on the status of an annotated computer printout sent to the records office by Middlesbrough council in 1987, to which my hon. Friend referred. It was submitted in support of some supplementary applications

for the concessionary licence. The printout listed the names and addresses of several people whose homes had been connected to the mobile warden system, and for whom the licence was now being sought. It also indicated that a number of properties, including Mrs. Littlefair's, were
being connected up but at the moment not applicable".
Long after the event—some nine months later, I believe—the council sought to argue that the printout constituted an application for Mrs. Littlefair. The records office disagreed. No names had been listed against the Dunbar avenue properties, and the records office was accordingly unable to regard it as anything more than a list of properties which might, at some future date, meet the qualifying criteria then in force.
It seems clear from the endorsement—alas—that it was not meant to be regarded as an application at the time; nor, in fact, could it have been, as under the 1984 regulations a concessionary licence could be issued only to a named person at a particular address, and no name was given. We reviewed—and had no option but to uphold—the NTVLRO decision when representations were made to us subsequently by Middlesbrough council and later by my hon. Friend. The law leaves Ministers with no discretion in this regard.
I fully accept that the circumstances of Mrs. Littlefair's case are particularly unfortunate. It is most regrettable—as my hon. Friend has said—that her hopes should have been raised by a letter from the records office, telling her at one stage that she had been granted the concession. That was quite wrong. The records office employee made a genuine error in interpreting the preserved-rights provision of the regulations. That came to our notice soon afterwards, when the renewal licence for the scheme was processed.
The simple fact is, however, that there is no discretion for us to perpetuate such an error once it has come to light. We have no power to allow an ineligible person to benefit from a concessionary licence to which he or she is not entitled by law. We could not, therefore, overturn the subsequent decision to withdraw the licence. I can only repeat my regrets to my hon. Friend, and through him to Mrs. Littlefair, that this mistake has occurred.
I shall reflect carefully on all that my hon. Friend has said, but I am afraid that I can offer no prospect for any change in the law which would help his constituents, although I well understand how unfair he feels that is.

Ms. Mowlam: The Minister pointed out in some detail how, as a result of trying to avoid inequalities in the 1988 regulations, the present inequalities have resulted. He has made that clear. He said that that is regrettable. Is he prepared to put it on record tonight that he thinks that the decision is unfair and unjust?

Mr. Lloyd: In these circumstances, there are bound to be some hard cases, because preserving the rights of people in accommodation that no longer qualifies would be seen as hard for those who move in, who were not there beforehand, and who have no claim on a concessionary licence. I believe that, after the Kirklees judgment had knocked a hole in the scheme, we had no option but to bring in new rules, and there were bound to be hard cases. I regret them, but that does not mean that the Government were mistaken in bringing in the new rules or in the form that they take.
Like the hon. Member for Redcar (Ms. Mowlam) and my hon. Friend the Member for Langbaurgh, I am saddened that this led to problems in particular places, especially where an application might have been made but

was not made. If applications were made, we are happy to see them properly processed and the concession continued. If they were not made, it cannot be a matter for the Government.

Question put and agreed to.

Adjourned accordingly at fourteen minutes to One o'clock.